BUDGET: Grant disbursements projected at 7,288bn

Accra, Nov. 16, GNA - Total grant disbursements for the year 2006 are projected at A27,228.6 billion, Finance and Economic Panning Minister Kwadwo Baah-Wiredu, said in Accra on Thursday.

Out of this, multilateral Highly Indebted Poor Countries' Initiative (HIPC) debt relief is projected at A21,205.4 billion, while Multilateral Debt Relief Initiative (MDRI) is expected to amount to =A22,100.8 billion, he said in the 2007 budget statement presented to Parliament.

He said out of the total amount, project grants and programme grants disbursements were expected to yield A22,669.4 billion and =A21,253 billion respectively.

However, total grant disbursements for the period under review, the first three quarters, amounted to A25,268.7 billion, indicating an 11.1 per cent shortfall under the budget target and a 26.7 per cent increase over the outturn for the same period in 2005.

Multilateral HIPC assistance was A2527.9 billion, 21.9 per cent lower than the outturn for the same period in 2005, while programme grants amounted to A21,144.9 billion, representing a 13.5 per cent increase over the outturn for the same period in 2005.

The outturn for project grants was A21,769.4 billion, about 28.5 per cent lower than the outturn for the corresponding period in 2005. "The relatively better performance of total grants for the period under review, as compared to the same period in 2005 resulted from receipts from the MDRI," the Minister added.

He said total loans amounted to A23,352 billion against a budget target of A24,395.6 billion.

Project loans were below the budget target by 26.5 per cent, while programme loans under-performed by 20 per cent against the budget target of A21,639 billion.

Mr Baah-Wiredu said total loan disbursements are projected at =A265,759.3 billion for the year, out of which the outturn for programme loans is projected at A21,596.3 billion and project loans at A24,163.0 billion.

He said exceptional financing of the budget, which is predominantly debt relief from bilateral partners totalled A2746.1 billion, about a 10.7 per cent increase over the amount recorded for the same period in 2005 and it was expected that the budget target of A21,729.1 billion would be met by the end of the year.

Giving a break down of the payments made, Mr Baah-Wiredu said the provisional outturn for total payments for the first three quarters of 2006, comprising statutory and discretionary payments was A231,929.7 billion.

This outturn compares to A223,723.7 billion for the corresponding period in 2005.

He gave the details to include the total statutory payments, which are made up of interest payments, amortization, transfers to households, and statutory funds and amounted to A28,165.1 billion, 3.9 per cent lower than the budget target for end September 2006.

The outturn indicates a 6.8 per cent increase over the outturn for the same period in 2005, while total statutory payments for the whole year are projected at A213,006.5 billion, compared to budget estimate of A213,993.2 billion.

External debt service for the period under review amounted to =A22,404.6 billion, which is 10.0 per cent higher than the outturn for the same period in 2005 and had a principal component due of A21,814.0 billion, 18.1 per cent lower than the outturn for same period in 2005. Mr Baah-Wiredu said payments on external interest amounted to =A2588.6 billion, 6.1 per cent lower than the outturn during the corresponding period in 2005 and that total external debt service was projected at A23,881.6 billion for the year, out of which interest payments are projected at A2858.6 billion.

He also mentioned domestic interest payments, including interests on Tema Oil Refinery bonds, which amounted to A21,944.8 billion, showing a 1.5 per cent increase over the outturn recorded for the same period in 2005.

He said domestic interest payments due for the whole year is projected at A22,426.8 billion.

Transfers to households, consisting of Pensions, Gratuities, transfers into the National Health Fund and Social Security contributions by government on behalf of public servants, collectively amounted to A21,638.4 billion for the first three quarters of 2006, the Minister said and added that this compared to a payment of A21,508.3 billion made during the corresponding period in 2005.

"Together these expenditure items are projected to register an outturn of A23,471.7 billion by the end of 2006," Mr Baah-Wiredu said.