Government spending, arrears within target in 2021 – BoG

Government spending and arrears clearance was broadly within the expected target, the Bank of Ghana has revealed in its January 2022 Monetary Policy Report.

According to the report, total expenditures and arrears clearance for 2021 was GH¢110.401 billion, about 25.1% of GDP.

This was however below the target of GH¢113.750 billion (25.9% of GDP).

The report said the outturn was 97.1% of the target and represented a year-on-year growth of 10.3%.


Compensation of employees including wages and salaries, pensions and gratuities, and other wage-related expenditure totalled GH¢31.663 billion, higher than the target of GH¢31.490 billion.

In terms of fiscal flexibility, compensation of employees constituted 47.5% of domestic revenue mobilised at the end of 2021, lower than the 52.4% recorded in the corresponding period of 2020.

Goods and Services

The use of Goods and Services for the period under review was GH¢8.624 billion, higher than the expected target of GH¢8.523 billion.

The outturn was 1.2% above the target and also represented a year-on-year decline of 16.7%.

Interest payment

Total interest payments of GH¢33.619 billion was higher than the envisioned target of GH¢32.528 billion.

Domestic interest payments accounted for 78.9% of the total interest payments, while external interest payments constituted the remaining 21.1%.

Total interest payments constituted 50.4% of domestic revenue, up from 45.6% in the corresponding period of 2020.

Grants to other government institutions

Grants to other government units made up of National Health Fund, Education Trust Fund (GET Fund), Road Fund, Energy Fund, District Assemblies Common Fund (DACF), Retention of IGFs, Transfer to Ghana National Petroleum Corporation and other earmarked Funds, all summed up to GH¢13.314 billion.

This was lower than the envisioned target of GH¢18.081 billion and represented a shortfall of 26.4%.

It, however, recorded a year-on-year growth of 12.1 percent.

Other expenditure

Other expenditure, made up of ESLA transfers and COVID-19 related expenditure for 2021, totalled GH¢4.537 billion, which was 33.2% below the target of GH¢6.791 billion.

Capital expenditure

Capital expenditure for the period was GH¢15.541 billion, about 3.5% of GDP.

This was higher than the envisaged target of GH¢12.222 billion (2.8% of GDP) by 27.2%.

This outturn represented a year-on-year growth of 28.6%.

Also, foreign-financed capital expenditure accounted for 65.7% of the total expenditure, with domestic financed capital expenditure making up the remaining 34.3%.