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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Ghana Government Fiscal Deficits: How Small or How Large?
Author:Amoako-Tuffour, JoeISNI
Year:1999
Periodical:Journal of African Economies
Volume:8
Issue:1
Period:March
Pages:1-30
Language:English
Geographic term:Ghana
Subjects:budget deficits
fiscal policy
Economics and Trade
Politics and Government
External link:https://jae.oxfordjournals.org/content/8/1/1.full.pdf
Abstract:Although public sector deficit measures that are based on broadest public sector coverage and which take into account payment arrears, inflation and exchange rate effects are the most accurate measures for assessing fiscal policy, they are often not readily available. This paper estimates different Ghana government fiscal balances which incorporate these considerations and highlights their implications. It shows that 1) the treatment of grants and divestiture (capital) receipts as regular revenues obscures the reality that primary expenditures needed for basic government functions have become unsustainable by conventional tax revenue since 1992; 2) conventional budget balance understated the broad deficit on average by about 3 percent of GDP between 1983 and 1995 and by as much as 4 percent of GDP by another deficit measure; 3) depreciation-induced interest cost on the external debt averaged 0.5 percent of GDP annually; 4) deficit financing by inflation tax on the stock of domestic debt averaged 3.8 percent of GDP; and 5) the consolidated public sector deficit exceeded the central government operational deficit on average by 1.2 of GDP for the period 1983-1995. Bibliogr., notes, ref., sum.
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