2022 Mid-Year Budget

2022 Mid-Year
Budget Review
Highlights
—
August 2022
Contents
01 Foreword 3
02 Executive Summary 5
03 Global Economic Review 9
04 Ghana Macroeconomic Context 12
05 Key Government Initiatives 18
06 Tax Initiatives 27
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Document Classification: KPMG Public 2
01
Foreword
Foreword
The country is currently facing a challenging These have contributed to rising cost of living and o Extending the waiver of interests and penalties to
socio-economic situation amidst an labour agitations. The overall real GDP growth for give opportunity to non-registered taxpayers to
increasingly difficult global environment. the first quarter of 2022 was 3.3 percent, compared take advantage of the waiver scheme and offer
to 3.6 percent recorded in the same period in 2021. operational records of these taxpayers to
At the reading of the 2022 budget, the Non-oil GDP for the first quarter of 2022 grew by 3.7 government.
government set out macroeconomic targets percent compared with the first quarter 2021 growth
designed to ensure an economic drive of 5.3 percent. o Revitalising non-tax revenue mobilisation by
towards a path of debt sustainability and introducing an end-to-end digitalised process for
increased growth. This drive dwindled as a Government's cut in discretionary spending property rate mobilisation. This is geared towards
result of factors including the global impact contributed to a marginal decline in expenditure for enhancing the mobilisation of non-tax revenues to
of the COVID pandemic and the Russia – the half year compared to the same period in 2021. assist government achieve its’ medium term
Ukraine war. Domestically, the government Government's continued commitment to this coupled targeted non-tax-to-GDP ratio of 4%.
revenue generation agenda was also hit by with overall fiscal discipline will propel their
the deferred passage of proposed revenue achievement of the revised overall budget deficit for o Minimising government’s tax expenditures through
measures leading to heightened investor the year. tax exemptions. The long expected Tax
concerns, credit rating downgrades, closed Government of Ghana has instituted some Exemptions Bill has been passed awaiting
access to the international capital markets, Presidential assent and once implemented, it will
revenue measures to enhance economic stability,
as well as rising domestic borrowing costs. ensure a more harmonised approach to granting
debt sustainability and continue to chart the Ghana
Beyond Aid agenda. These policies include the tax exemptions and eliminate associated
There is currently severe pressure on the administrative gaps.
below:
Cedi, causing its significant depreciation
o Enhancing VAT Mobilisation by digitalising the As government has made conscientious efforts in
against major foreign currencies coupled
approaching the International Monetary Fund (IMF)
Anthony Sarpong
with increases in food prices, fuel, transport collection of VAT revenues (e-VAT) to minimise
VAT mobilisation gaps and assist government to revive the economy to pre-COVID era and regain
fares, cost of borrowing for businesses and
achieve its’ tax-to-GDP target of 20% within the investor confidence, we wish to admonish
households. Inflation as at the end of June
Senior Partner 2022 was 29.8 percent as compared to 9.0 medium term. government to stick to fiscal discipline in line with the
percent in June 2021. The cedi has Fiscal Responsibility Act. Government should also
o Introducing upfront payment of VAT on boost its digitalisation drive in revenue mobilisation
depreciated against the US dollar by 16.86
importers not registered for VAT effective 1st to highly automate the process and obtain optimised
percent between January and end-June
October 2022. tax and non-tax revenues.
2022; compared to 4.1% at the end of 2021.
2
02
Executive
Summary
Executive Summary
Mid Year Results
(1/3)
5.6%
Real Sector Performance
As at June 2022, the Agriculture sector
recorded the highest growth of 5.6%,
followed by the Services sector with 3.7%
while the Industry saw growth of 1.3%.
85%:15%
Proportion of Tax to Non Tax Revenue for
H1 for 2022
3.3%
10%
Fiscal Deficit as at GDP Growth Rate as
June 2022 8% As at H1 2022, Debt to GDP ratio was at June 2022
6% 78.3% as compared to 76.6% as at
Growth rate (%)

4% December 2021 and 74.4% as at
December 2020.
2%
29.8%
0%
Debt to GDP Ratio Fiscal Developments for H1 2022
-2%
GH¢ 37.8bn
79%
78.30%
-4%
2019 2020 2021 Jun-22 78%
Inflation as at June 2022 Agriculture Services Industry 77% 76.60%
Ratio (%)
Total Revenue & Grants
76%
Proportions of Interest Payments to
19.0% GH¢ 61.9bn

Revenue & Expenditure for H1 2022 75% 74.40%
54% 33%
74%
73% Total Expenditure
Monetary Policy Rate as at 72% Total Expenditure as at H1 2022 is now

May 2022 2020 2021 Jun-22 164% of Total Revenue & Grants
of Total Revenue of Total Expenditure
Executive Summary (2/3)
Revised 2022 Targets
88%:12%
Revised Primary Surplus
Targets
6.6%
Revised Fiscal Deficit
The revised primary balance is a surplus
of GH¢2,461 million (0.4% of revised
GDP), up from the 2022 Budget estimate
of a surplus of GH¢435 million (0.1% of
Revised proportion of Tax to Non Tax
Revenue for H1 for 2022
3.7%
Revised Economic
target for 2022 GDP), as shown below:
(% of GDP)
3 Revised Fiscal Deficit target Growth target for
2022
2.40
2.5 The revisions in Government’s fiscal
2 operations results in a fiscal deficit (on
GH¢ billion
cash basis) of GH¢38,900 million (6.6%
1.5 of Revised GDP) up from the originally
28.5%
approved 2022 Budget deficit target of Revised Fiscal Targets for 2022
1
GH¢ 96.8bn
0.4 GH¢37,012 million (7.4% of GDP).
0.5
39.5
0
38.90
Revised Inflation target for 39 Total Revenue & Grants
GH¢ billion
2022 2022 Target Revised 2022 Target
38.5
Revised proportions of Interest Payments
GH¢ 135.7bn
38
> 3 months
to Revenue & Expenditure for 2022 37.5
43% 30%
37
37
Total Expenditure
36.5
Revised import cover target for
2022 36
2022 Target Revised 2022
of Total Revenue of Total Expenditure Target
Executive Summary (3/3)
Tax Revenue Initiatives Non - Tax Revenue Initiatives
Extension of the exemption of

Capital Gains Tax (CGT) on Rolling Out of an Electronic
Invoicing System (e-VAT) Implementation of a Unified
securities listed on the Ghana
to assist the GRA in its VAT Common Platform for Property
Stock Exchange (GSE) for
assessment and compliance Rate Administration to ensure
additional five (5) years to
reviews. optimal efficiency and
deepen trading activities on the
effectiveness in property rate
capital market
administration in the country.
Extension of Waiver of Penalties Passing of the Tax Exemption Bill
and Interests up to December 2022 effective July 2022 to ensure uniformity in Re-introducing of Road Tolls after
to ease cashflow burdens on granting of tax exemptions. completion of the Accra-Tema
taxpayers and capitalize on widening Motorway Expansion Project
the tax net. as a means of recovering costs,
paying lenders and offering returns to
Introduction of Upfront VAT on equity partners to the expansion
Full Implementation of the amended
project.
registrable importers not in GRA thresholds under the presumptive tax
VAT Database to enhance GoG’s scheme Effective from 2022 Q4. Passing of Fees and Charges
tax compliance drive within the to widen the self-employed tax net, Amendment Bill
informal sector. assisting GoG to achieve it’s tax revenue to facilitate the revision of public
sector fees and make public sector
mobilization targets of 20% tax-to-GDP institutions price competitive.
ratio by 2024.
Extension of the existing
Suspension of Quarterly Income Tax
Instalment Payment till end of 2022
to minimise the tax burdens on self
employed persons, and certain class
of commercial vehicle owners.
8
03
Global Economic
Review
A series of unprecedented events …
World Economy Today
Russia – Ukraine War
COVID-19 • The global economy was barely
• Russia invaded Ukraine on February 21
• COVID-19 declared a pandemic on March recovering from the impact of COVID-19
11 by WHO. The impacts include: • This has led to rising commodity prices,
fertilizer shortage and an energy crises • The invasion of Ukraine has had a ripple
• Resultant disruption in global supply effect with heightened inflationary
chains and industries such as travel and • The energy crises is largely due to the pressures on economies.
tourism boycott of fossil fuels in line with sanctions
placed on Russia • Sanctions have been placed on Russia
• Restrictions impacted global trade and Russia in retaliation has cut gas
weakening global supply chains • Grain shipments were halted impacting supply to Europe
global food security
• Heightened fiscal pressures on developing
economies due to stimulus packages
2020 2021 2022
COVID-19 Vaccination Sanctions

• COVID-19 vaccines were created less than
Potential Ukraine Invasion
• A plethora of countries, G7 and the EU place
a year after COVID-19 was declared a • The United States warns of a potential varied sanctions on Russia
pandemic by WHO invasion of Ukraine by Russia in late • These sanctions were placed on trade,
• 62.4% of the world’s population are fully January due to the possibility of Ukraine investments, some banking activities, travel
vaccinated (July 2022) joining NATO bans on Russian officials, etc.
Source: WHO website,S&P Global, PIIE website, Our World in Data website
Global Economic Developments & Outlook
Global growth continues to decline and inflationary pressures are on the rise. The global GDP growth rate is projected to reduce from 6.1% in 2021 to
3.2% in 2022 and further slow to 2.9% in 2023
NORTH AMERICA SUB-SAHARAN AFRICA

• US Fed rate has been increased 3 times this year. The most recent • SSA is facing severe food shortages due to Russia’s blockage of vital
increase of 0.75% in June this year was the largest in 3 decades. Ukrainian ports and fertilizer shortages. Global food prices have risen
by 17% since January.
• US inflation in June 2022 was 9.1% - the highest in nearly 40 years.
• Low vaccination rates has left many countries susceptible to new
• Oil has soared in 2022, reaching a 14-year high of $139 per barrel.
COVID-19 waves. As at July 2022, only 26% of Africa’s population
• Growth in the United States is projected to be 2.3% and 1% in 2022 had received at least one dose of the vaccine.
and 2023 respectively. This negative revision is due to significant fall
• Sub-Saharan Africa (SSA) is projected to grow at 3.8% and 4% in
in consumer spending as a result of the deterioration of household
2022 and 2023 respectively.
purchasing power
EUROPE MIDDLE EAST AND CENTRAL ASIA

• Russia is retaliating EU sanctions by cutting supply of gas to the • Further lockdowns and the deepening real estate crisis in China and
continent. Russia has cut flows through the Nord Stream 1 pipeline. increased monetary policy tightening in India have led to contractions
in output.
• The European Central Bank has raised interest rates for the first time
in 11 years by 0.5% as inflation reaches 8.6% in the Eurozone. • Trade between the Russian Federation and the BRICS countries
increased by 38% to reach $45 billion in the first three months of
• European gas prices have surged by over 200% in the past year. 2022. China and India have collectively spent $24 billion on energy
• The Euro area is expected to grow at 2.6% in 2022 and slow to 1.2% related purchases from Russia.
in 2023. Contraction in the Euro Zone is expected to result from the • Growth in the Middle East and Central Asia has been revised to 4.8%
spill overs from the war in Ukraine and tighter monetary policy. in 2022 and further decreased by 1.3 percentage points to 3.5% in
2023.
Source: World Economic Outlook, IMF (July 2022), Bloomberg, Financial Times, S&P Global Commodity Insights, UN Food and Agriculture Organisation.
04
Ghana Macro-
Economic
Context
Macroeconomic Snapshot
2021 2022 2022 Revised 2022 End June
Macroeconomic Performance Outturn Targets Targets Outturn
Overall GDP Growth Rate 5.4% 5.8% 3.7% 3.3% **
Non Oil GDP Growth Rate 6.9% 5.9% 4.3% 3.7% **
End Period Inflation Rate 9.0% 8.0% 28.5% 29.8%
Fiscal Deficit (% of GDP) 11.4% 7.4% 6.6% 5.6% *
Primary Balance (% of GDP) (1.5)% 0.1% 0.4% (1.5)% *
Import Cover
(Number of months cover)
4.3 4.0 > 3.0 3.4
* Provisional
** As at Q1-2022
Source: Mid Year Budget Statement 2022
Fiscal Developments for H1 2022
Total Revenues & Grants – GH¢ 37.8 billion Total Expenditure (excl. arrears) – GH¢ 61.9 billion
Tax Revenue (Net of refunds) – GH¢ 30.1 billion Compensation of Employees – GH¢ 17.1 billion
— Taxes on Income and Property: GH¢ 15.3 billion — Wages & Salaries constitutes ~ 89%
— Taxes on Domestic Goods and Services: GH¢ 12.3 billion — Social Contributions ~ 11%
— International Trade Taxes: GH¢ 4.2 billion
— Tax refunds: (GH¢ 1.8 billion)
Use of Goods and Services – GH¢ 2.2 billion
— Representing 0.4% of GDP.
Social Contributions – GH¢ 210 million
— This is made up of SSNIT contribution to NHIL and proceeds from
the Energy Sector Levies, representing 0.04% of GDP
Interest Payments – GH¢ 20.5 billion
— Domestic: GH¢ 15.9 billion ~ 78%
Non tax revenue – GH¢ 5.5 billion — External: GH¢ 4.6 billion ~ 22%
— Representing 1.1% of GDP
Revenue Expenditure
Subsidies, Social Benefits etc. – GH¢ 14.9 billion
— GH¢ 167 million for Subsidies
Other Revenue – GH¢ 1.8 billion — GH¢ 4.6 billion for Other Expenditure
— Representing 0.4% of GDP — GH¢ 10.1 billion for Grants to Other Government Units
Capital Expenditure – GH¢ 7.1 billion

Grants – GH¢ 250 million — Domestic financed ~ 11%
— This represents Project Grants. — External financed ~ 89%
✓ Total government revenue and grants of GH¢ 37.8 billion represents 7.5% of GDP for January to June 2022. This is driven mainly by taxes on income and property (~40% of total revenue and
grants) as well as taxes on domestic goods and services (~33% of total revenue).
✓ Total expenditure of GH¢ 61.9 billion for the same period represents 12% of GDP.
✓ There was an overall budget deficit of GH¢ 28.2 billion (5.6% of GDP) against a programmed deficit of GH¢ 19.7 billion (3.9% of GDP) for January to June 2022. This is as a result of
shortfalls in revenue and faster execution of expenditures
Sources: 2022 Mid Year Budget Review
Public Debt
Public Debt Dynamics Public Debt Development Debt to GDP Ratio
450,000
• The provisional nominal debt stock as at end-June
2022 stood at GHȼ393,439.03 million representing 78.3 79.00%
percent of GDP. This was up from GHȼ351,787.02 400,000
million at the end of December 2020. External and
domestic debt represented 51.7% and 48.3% of total 78.00%
debt, respectively. 350,000
• The increase in the debt stock was mainly as a result

300,000 77.00%
of the adverse impacts of COVID-19, the Russia-
48%
Ukraine war, surging inflation and exchange rate
shocks during Q1-2022 in particular, which saw a 250,000
52%
76.00%
sharp depreciation of the currency. This decline in the
exchange rate was due to the downgrade of 51%
government credit ratings, as well as seasonal 200,000
78.30%
demand pressures from corporate and the energy 75.00%
sectors. 150,000
48%
76.60%
• As a result of the challenges faced during the year, 50% 74.00%
the government decided to return to the International 52%
100,000
Monetary fund (IMF) for support in its Enhanced 48%
Domestic Program in order to tackle its balance of 49% 74.40%
52% 73.00%
payments issues. After their first visit, the IMF team 50,000
50%
acknowledged that Ghana is facing a challenging
economic and social situation which has led to
- 72.00%
slowing economic growth, accumulation of unpaid 2018 2019 2020 2021 Jun-22 2020 2021 Jun-22
bills, a large exchange rate depreciation and a surge
in inflation. External Debt Domestic debt
Sources: 2022 Mid Year Budget Review
Monetary Sector
Inflation Depreciation of GH¢ Depreciation of Depreciation of
Interbank Weighted Average Lending Monetary Policy
Rate (June 2022) against US$ GH¢ against £ GH¢ against €
Average Rate Rates of Banks Rate (May 2022)
June 2022 June 2022 June 2022
18.43% 22.53% 29.8% 19.0% 16.93% 7.69% 9.92%
• Inflation recorded its highest rate since September 2009 as it increased • As a result of the above developments in the interbank market, average bank
from 13.9% in January 2022 to 29.8% in June 2022. This rise was lending rate increased from 20.04% in December 2021 to 22.53% in May
influenced by food and non food pressures including sharp rises in prices 2022.
of petroleum products as well as currency depreciation effects from the • The exchange rate depreciated against the US dollar by 16.93%, pound
first quarter of 2022. sterling by 7.69% and euro by 9.92%. This was because of heightened
• The Monetary Policy Rate (MPR) escalated by 450bps over the March pressures in the foreign exchange market including the downgrade of
and May Monetary Policy Committee meetings to 19% in May 2022 due to government credit ratings, monetary policy normalisation in advanced
inflationary pressures. This and other policies including an increase in the economies and seasonal demand pressures from corporate and energy
cash reserve requirement translated into a rise in weighted average sectors.
interbank rate of 18.43% against 12.68% in May 2022 and December
2021 respectively.
Real Sector Performance
Industry Services Agriculture
1.3%
Growth Rate as at
3.7%
Growth Rate as at
5.6%
Growth Rate as at
June 2022 June 2022 June 2022
The Industry sector recorded the least The Agricultural sector recorded the
The growth rate was mainly driven highest growth rate fuelled by growth in the
growth rate amongst all three sectors. by the Information and
This was fuelled by the Water Supply, Fishing, Livestock and the Crops sub-
Communication, Transport and sectors which expanded by 26.1%, 5.5%,
Sewerage, Waste Management & Storage and the Hotel and
Remediation Activities and Electricity and 5.2%, respectively. The Forestry and
Restaurants subsectors, which Logging sub-sector, however, contracted
subsectors which grew by 25.4%, and expanded by 26.6%, 6.4%, and
15.9%, respectively. Q1-2022 however by 0.5%.
5.3%, respectively.
saw a contraction of the Construction
sub-sector by 2.6%.
The Bank of Ghana’s updated Composite Index of Economic Activity (CIEA) recorded an annual growth of 15.8% in March 2022 compared to 26.3% in the
corresponding periods of 2021. This buttresses the point that there has been a moderation in growth momentum in Q1-2022. The key drivers of economic activity
during the period were increased industrial production, credit to private sector, exports and higher tourist arrivals.
Source: Ministry of Finance Mid Year Budget Statement 2022
05
Key Government
Initiatives
Focus areas
in the budget 1 Modernization of Agriculture
Strategic Anchor
2 Strategic positioning of Ghana as a Regional Industries
Government will continue hub
their execution of the
transformation agenda • Agriculture
3 Digitalization for improved Service Delivery
through the implementation • Financial Services
of reforms to boost revenue • Automotive
mobilisation, judicious use 4 Manufacturing and industrialization
• Energy
of public resources, and
• Manufacturing
improved efficiency in public
5 AfCFTA and Trade • Construction
spending.
• Health
6 FDI Promotion
Status of government initiatives at a glance
The Government set out to complete GHS GHS GHS
ongoing programmes and projects,
consolidating the gains made from
COVID-19 recovery efforts to 1.98mn 27.3mn 2.2bn
continue the drive the economy’s
YouStart GIRSAL NABCO
transformation.
was disbursed under the guarantees issued for loans worth invested in NaBCo which
YouStart pilot to 46 individuals GH¢94.7 million which created engaged 100,000
Government is poised to facilitate and and 8 Associations/ Groups and safeguarded 1,309 jobs people,preparing over 35,000
graduates for the world of work
support private and sector partnerships in
its efforts to encourage the citizenry in both
GHS
formal and informal sectors to collaborate
towards creating decent growth and
economic development for all.
5.3bn 296 25,000
Agriculture and manufacturing are expected Free SHS 1D 1F Youth in Agric
to be the key drivers of the agenda
supported by the budget allocations and has been spent to enable projects are at various stages trained in the “Youth in
project focus. 1,261,495 students have of implementation, out of which Innovative Agriculture” initiative
access to secondary education 125 are currently operational by the National Entrepreneurial
and Innovation Programme.
Ghana CARES “ObaatanPa” Initiatives
Agriculture Tourism, Arts & Culture
▪ 1,274,229 farmers in the Northern sector (out of an ▪ Commenced upgrading of 3 culturally significant sites Technology
estimated 3 million farmers nationwide) and 32,970 namely – Aburi Botanical Gardens, Yaa Asantewaa ▪ The private sector is being supported to manufacture
value chain actors have been registered Mausoleum (Ejisu Besease), and the Pikworo Slave various tools that have been successfully prototyped by
Camp (near Paga) CSIR and GRATIS
▪ 50 percent Interest Rate Subsidy on loans worth GHS
▪ rolled-out a comprehensive marketing and branding
5,953,288.73 have been offered to the private sector
strategy to complement revitalisation efforts in the ▪ GhanaCARES is supporting the construction of a
agribusinesses
sector Foundry and a Machine Tooling Centre, which are 95
▪ GHS 27.3 million has been provided as guarantee ▪ 1,386 actors have been trained and certified in digital percent and 10 percent complete, respectively.
cover for loans amounting to GHS 94.7 million under marketing, customer service,and tourism product
GIRSAL; safeguarding 1,309 jobs knowledge
Agriculture Manufacturing Tourism, Arts Youth Economic Technology

and Export & Culture Employment Enclave
Manufacturing and Export Youth Employment Economic Enclave

▪ Efforts have commenced toward establishing a Bioequivalence ▪ The National Training and Retraining ▪ Secured a parcel of land in South-Eastern Ghana, at Asutsuare, for
Centre at Noguchi Programme under the National the Enclave Project
▪ Five pharmaceutical companies are being prepared to receive Unemployment Insurance Scheme (NUIS), ▪ Finalised arrangements on a proposed US$30 million grant from
support to upgrade their operations to WHO standards has been launched to equip 15,000 MasterCard Foundation to support the youth in rice and poultry
Ghanaians with employable skills for production.
industrialisation
▪ Signed an MoU to leverage the capacity and expertise of the
Millennium Development Authority (MiDA) to accelerate
implementation of key interventions under the Enclave Programme
▪ The Ghana Investment Promotion Centre is developing an investment
promotion programme which targets the key priorities of the
GhanaCARES Programme.
Document Classification: KPMG Public 21 21
YouStart
• DEP is designed to support
urban and rural nascent
micro businesses with
Overview Stakeholder micro loans and starter pack
products of up to
Government announced an ambitious
and pioneering entrepreneurial initiative Consultations GH¢50,000 and
GH¢100,000, respectively,
in the 2022 Budget Statement and Series of stakeholder consultations were at concessionary rates.
Economic Policy known as ‘YouStart’ to held with the Association of Ghana
• The commercial
Industries (AGI), all Regional Ministers
create one million jobs over three programme will be
years (2022–2024). and MMDCEs, Civil Society spearheaded by some
YouStart Organizations, Youth groups, and

Student Leaders, among others, to
Participating Financial
Institutions (PFIs) with
sensitise them as well as solicit inputs to support from the Ghana
improve the programme. Association of Banks (GAB).
The PFIs, through the GAB,
have developed a
YouStartwas piloted in Sub Programmes standardised loan product of
up to GH¢500,000 at a
March 2022 with 70 YouStart is anchored on the following

programmes namely: District
concessionary rate.
• The YouStart Grace
participants Entrepreneurship Programme (DEP);
Commercial Programme (CP); and
Programme will be
spearheaded by Faith-Based
GH¢1.98 million was disbursed under YouStart Grace. organisations across the
the pilot to 46 individuals and 8 country to target
Associations/Groups (with membership unemployed youth, women-
of between 6 and 45), based on their owned businesses, and
specific needs. rural entrepreneurs.
Other Flagship Programmes
One District Zongo Strategic
Planting for Food Free SHS
One Factory Development Anchor
and Jobs Programme
(1D1F) Fund Industries
• 125 out of 296 1D1F • The yields of maize increased • The Zongo Development • Nissan has commissioned • GH¢ 5.3 billion has been
projects undertaken from 1.8mt/ha in 2016 to Fund (ZDF) completed 11 an automotive assembly invested to enable
since 2017 are currently 3.8mt/ha in 2021, rice from out of 17 recreational parks. plant in Ghana (in Tema), 1,261,495 Ghanaian
operational across the 2.7mt/ha to 4.3mt/ha, and • The Fund completed 24 six- with the capacity to children access to
country. Soya 1.7mt/ha to 2.2mt/ha. unit classroom blocks with assemble over 31,000 secondary education under
• 33,500mt of improved seeds additional 14 units at various vehicles per annum. the Free SHS programme
and 304,500mt of organic and stages of completion. • Four (4) additional plants at the end 2021
inorganic fertilizers will be • The Fund supplied 2,400 are expected to be • Out of the 571,892
distributed to beneficiary units of dual desks to commissioned this year, registered JHS candidates,
farmers in the northern sector in schools. bringing the total to nine 555,353, representing 97.1
the second half of the year. • Thirty-one mechanised (9) global brands percent, were placed into
• 65 out of 80 planned community water systems SHS this year.
warehouses were completed as were completed while
at June 2022 in the One District another 14 are over 80
One Warehouse intervention. percent complete.
Emerging Developments
01 02 03
National Security Food Security Energy Sector Developments
• The Ghana Armed Forces (GAF) is implementing To enable households and farmers cope and support • The Kasoa Bulk Supply Point (BSP) Project which
an enhanced surveillance programme for the stable food supply, Government has taken the comprises the re-construction of a section of
country's air space and international borders following immediate measures: GRIDCO’s 161kV Winneba-Mallam transmission
lines and tie-in-works has been completed
• The Ghana Police Service has recruited and • Place a temporary ban on grain (maize, rice, and
trained 5,000 additional recruits soya) exports; • The Volta-Achimota Lot of the 161KV Volta-
Achimota-Mallam Transmission Line Upgrade
• The Service has also launched the ‘‘SEE • Promote the use of organic fertilizers and
Project to has advanced to 85 percent, from 83
SOMETHING, SAY SOMETHING’’ campaign, cultivation of crops such as roots which require
percent;
intensified anti-armed robbery operations, and less fertilizer;
intelligence-led swoops throughout the country. • Connected 58 communities to the national grid as
• Monitor food and input prices to pick early warning
at end June 2022
signals of potential food crisis in order to take
prompt remedial action; and • Commissioned the Solar Irrigation Project at the
Ho Technical University on 18th March, 2022
• Finalise modalities for the haulage of produce from
farm gates in food growing areas to the market
centres.
04 05
Power Purchase Agreements Road Sector Programme Road Sector Programme
Negotiations Various road projects initiated by the government • Upgrading of Salaga - Ekumdipe - Kpandai Road
• Government has successfully renegotiated Power are at different levels of completion • Partial Reconstruction of Bawjiase - Adeiso Road
Purchase Agreements (PPAs) with six Independent • Tamale Interchange Project completed - Lot 1
Power Producers (IPPs), namely, Karpower, • PTC Roundabout Interchange Project • Work on the construction of 50 prefabricated
Cenpower, Early Power, Twin City Energy • Upgrading of selected Feeder Roads in Ashanti bridges to improve connectivity
(formerly Amandi), AKSA Energy and Cenit. and Western Regions completed • The Design, Build, Finance, Operate, and
• These renegotiated agreements are expected to • Sunyani Inner City Road works Maintain (DBFOM) Accra – Tema Motorway and
have savings estimated at US$13.2 billion over the Extension PPP Project (27.7km) is at the
• La Beach Road Project (Lots 1 & 2), which includes
life of the PPAs procurement stage. Site works are expected to
a 3-tier interchange at Nungua
commence in September 2022.
• Phase II of the Obetsebi Lamptey Circle
• The completed road will be tolled to recover the
Interchange and the flyover on the Accra-Tema
whole life cost of the completed infrastructure as
Motorway from the Flower Pot (Spintex road)
well as pay lenders and provide a return for equity
• Kumasi-Lake Roads and Drainage Extension investors.
project, and construction of the Chirapatere Bus
Terminal
06 07 08
Railways Infrastructure Health Infrastructure Education
• Government is within target to complete the • Construction work has started in 87 out of the • 3,620,468 pupils in 10,832 public basic schools
construction of the new Tema to Mpakadan 111 sites earmarked for the Agenda 111 project. have been fed with one hot meal every school
Railway line by the end of this year. This represents 78%. going day in the first half of the year.
• The programme provides employment for 32,496
The following health infrastructure projects are caterers.
expected to be completed by the end of the year
• Construction of one district hospital and five
Polyclinics in Western Region
• Expansion and equipping of four selected
facilities project
• Equipping of Upper East (Bolgatanga) Regional
Hospital, Phase II
06
Tax Initiatives
Tax Initiatives –Revenue OptimisationMeasures
1 2
Extension of the exemption of Capital Gains Extension of Waiver of Penalties
Tax (CGT) on securities listed on the Ghana and Interests up to December 2022
Stock Exchange (GSE) for additional five (5)
years
• Ghana Revenue Authority (GRA) to extend
• The exemption of CGT on securities traded on the the waiver of penalties and interests up to
PROPOSED TAX
GSE to be extended for an additional five (5) year end of December 2022.
INITIATIVE
period in order to deepen the Ghanaian capital • The extension has been proposed as part of
market and attract investors. measures by government to ease the
• Considering that the current capital market is being cashflow burdens on companies and
sustained mainly by non-residents, the expiration of individuals.
the current exemption in December 2021 sought to
dwindle capital market investments, hence the
extension.
• With the implementation of this initiative there is • Considering that the Ghana Revenue Authority
has boosted its’ tax revenue mobilization drive
PROPOSED
expected to be a burgeoning trading on GSE from both

IMPACT OF
INITIATIVE
resident and non-resident investors, which will lead to with the prior period penalty and interests
an increase in market capitalization, enhance economy waiver regimes, the extension is expected to
competitiveness as well as increase overall investor further increase government’s tax revenue.
confidence in the Ghanaian economy, which has been • This will assist government to meet its’ medium
impacted due to recent global happenings. term tax-to-GDP ratio of 20% by 2024.

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4
Extension of the existing Suspension
3
Introduction of Upfront VAT on
registrable importers not in GRA of Quarterly Income Tax Instalment
VAT Database Payment till end of 2022
PROPOSED TAX
• Government to introduce an upfront payment

INITIATIVE
• GRA to extend the existing suspension of

of VAT on importers that are not registered for
2022 first and second quarters income tax
VAT.
instalment payment for categories A, B and C
• The qualifying importers under this initiative self employed persons, and owner of
will be able to recover the upfront VAT paid commercial vehicle classes C1, C2, C3, C5,
once they register and file their VAT returns. C7 and C9 per the L.I. 2244 up to end of 2022
• This is expected to commence from 1st
October 2022.
• The effective implementation of the Upfront

VAT on unregistered importers will enhance • This initiative is expected ease tax burdens
PROPOSED
IMPACT OF
INITIATIVE
GoG’s tax compliance drive particularly on self employed and certain class of
within the informal sector of the economy, commercial vehicle owners in the economy.
considering that a significant number of
economic activities are performed in the
informal sector.
• This will also broaden the current tax net.

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Rolling Out of an
5
Implementation of a Unified
Electronic Invoicing
System (e-VAT) 6 Common Platform for Property
Rate Administration
• Ghana Revenue Authority in conjunction
• The GRA shall effective the 4th with the Ministry of Local Government and
PROPOSED TAX
quarter of 2022, roll out an electronic the various District Assemblies to launch an
INITIATIVE
invoicing system (e-VAT) to provide end-to-end digitalised process (called the

the GRA with real time information on Uniform Common Platform) in the
VAT related transactions, so as to aid administration and collection of property
VAT mobilization efforts. rates. This is proposed to commence in
August 2022.
• The e-VAT initiative is expected to eliminate • This initiative will enhance property rate
all bottlenecks currently faced by the GRA in compliance in the country as well as assist
its assessments or compliance reviews of government to meet its’ medium term non-tax
PROPOSED
IMPACT OF
INITIATIVE
VAT amount payable by taxpayers. revenue-to-GDP ratio of 4% by 2024.

• The initiative is also expected to ensure an
• This initiative is also expected to enhance optimal efficiency and effectiveness in the non-
general VAT compliance levels within the tax collection and expand the revenue base of
economy. the various Assemblies

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7 8
Re-introducing of Road Tolls after Full Implementation of the
completion of the Accra-Tema amended thresholds under the
Motorway Expansion Project presumptive tax scheme
• The GoG as a means of

PROPOSED TAX
• The MoF has announced the full

recovering the costs of the
INITIATIVE
implementation for new presumptive tax

Accra-Tema Motorway threshold on turnover from GHS200,000 to
Expansion project, as well as GHS500,000 for self-employed individual
pay lenders and offer returns for persons effective from 2022 Q4.
equity investors will be re-
introducing road tolls after the
completion of the project.
PROPOSED
IMPACT OF
INITIATIVE
• This initiative is likely to bridge the existing • The full implementation of the increased
gap in GoG’s non-tax revenue mobilization threshold will broaden the tax net, by drawing
efforts as well as assist government to a lot more self employed persons with annual
meet up the non-tax revenue-to-GDP ratio turnover up to GHS500,000 into the tax net.
of 4% by 2024.

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9 Passing of Tax Exemption Bill
10 Passing of Fees and Charges
Amendment Bill
PROPOSED TAX
INITIATIVE
• Parliament has passed the Fees and

Charges Amendment Bill, which replaces the
Fees and Charges (Miscellaneous) Act
• The parliament of Ghana has
2018, Act 983, and offers the Ministry of
passed the Tax Exemption Bill into
Finance (MoF) the authority to adjust fees
an Act in July 2022
charged by public sector institutions
• This Act will facilitate the revision

of public sector fees and make
PROPOSED
IMPACT OF
INITIATIVE
public sector institutions price

• This is expected to provide a uniform competitive.
granting of tax exemptions across all
Ministries and sectors in the economy.

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Contact Us:
Anthony Sarpong Andrew Akoto
Senior Partner, Partner, Head of
KPMG in Ghana Advisory Services
Email: asarpong@kpmg.com Email: aakoto@kpmg.com
Mobile: +2330204306718 Mobile: +2330208174629
kpmg.com/socialmedia
© 2022 KPMG a partnership established under Ghanaian law and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee. All rights reserved.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and
timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the particular situation.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.

2022 Mid-Year Budget

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2022 Mid-Year

03 Global Economic Review 9

04 Ghana Macroeconomic Context 12

05 Key Government Initiatives 18

Growth rate (%)

Inflation as at June 2022 Agriculture Services Industry 77% 76.60%

19.0% GH¢ 61.9bn

73% Total Expenditure

Monetary Policy Rate as at 72% Total Expenditure as at H1 2022 is now

Extension of the exemption of

2020 2021 2022

COVID-19 Vaccination Sanctions

NORTH AMERICA SUB-SAHARAN AFRICA

EUROPE MIDDLE EAST AND CENTRAL ASIA

Overall GDP Growth Rate 5.4% 5.8% 3.7% 3.3% **

Non Oil GDP Growth Rate 6.9% 5.9% 4.3% 3.7% **

End Period Inflation Rate 9.0% 8.0% 28.5% 29.8%

Fiscal Deficit (% of GDP) 11.4% 7.4% 6.6% 5.6% *

Primary Balance (% of GDP) (1.5)% 0.1% 0.4% (1.5)% *

Source: Mid Year Budget Statement 2022

Capital Expenditure – GH¢ 7.1 billion

• The increase in the debt stock was mainly as a result

Sources: 2022 Mid Year Budget Review

18.43% 22.53% 29.8% 19.0% 16.93% 7.69% 9.92%

Source: Mid Year Budget Statement 2022

Source: Ministry of Finance Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

Agriculture Manufacturing Tourism, Arts Youth Economic Technology

Manufacturing and Export Youth Employment Economic Enclave

YouStart Organizations, Youth groups, and

March 2022 with 70 YouStart is anchored on the following

Source: Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

Source: Mid Year Budget Statement 2022

expected to be a burgeoning trading on GSE from both

Source: Mid Year Budget Statement 2022

• Government to introduce an upfront payment

• GRA to extend the existing suspension of

• The effective implementation of the Upfront

Source: Mid Year Budget Statement 2022

invoicing system (e-VAT) to provide end-to-end digitalised process (called the

VAT amount payable by taxpayers. revenue-to-GDP ratio of 4% by 2024.

Source: Mid Year Budget Statement 2022

• The GoG as a means of

• The MoF has announced the full

implementation for new presumptive tax

Source: Mid Year Budget Statement 2022

• Parliament has passed the Fees and

• This Act will facilitate the revision

public sector institutions price

Source: Mid Year Budget Statement 2022

Document Classification: KPMG Public

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