Deficit Financing – NBC Institute

PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

Question

The Office of the Accountant-General of the Federal Republic of Mazobia presented the following financial data (estimates) concerning the budget for 2017:

Federation Account Budget: N66,955,000,000
Total Value Added Tax Collections: N36,690,000,000
Federal Independent Revenue: N6,380,000,000
Total Expenditure by the Republic: N52,715,000,000

The revenue accruable to the Federal Republic of Mazobia is based on the following revenue-sharing formula among the three tiers of government:

Federal Government: 56%
State Governments: 24%
Local Governments: 20%
Total: 100%

The total expenditure of the Federal Republic of Mazobia is distributable as follows:

Statutory Transfers: 8%
Debt Services: 12%
Other Service-Wide Votes: 6%
Capital Expenditure: 32%
Personnel Cost: 34%
Consolidated Revenue Fund (CRF) Pensions: 3%
Subventions to Parastatals: 5%
Total: 100%

Share of Value Added Tax collections are as follows:

Federal Republic (as collection costs): 15%
State Governments (based on derivation): 50%
Local Governments (based on derivation): 35%
Total: 100%

Federal Republic of Mazobia (FRM) shares its own portion of the Federation Account (56%) as follows:

FRM CRF available for FRM budget: 48.5%
Federal Capital Territory: 1.0%
Share of Derivation & Ecology: 1.0%
Statutory Stabilisation: 1.5%
Derivation of Natural Resources: 4.0%
Total: 56.0%

Based on the available data, you are required to:

a. Calculate the revenue estimates accruable to the Federal Republic of Mazobia from:
i. Federation Account (2 Marks)
ii. From Value Added Tax (2 Marks)
iii. Total revenue accruable to the Federal Republic of Mazobia (3 Marks)

b. Calculate the share of Federation Account allocation to the Federal Government among the various beneficiaries (16 Marks)

c. How much of the Federal Government of Mazobia budget will be by deficit financing? (2 Marks)

d. Enumerate any FIVE exclusive Internally Generated Revenue payable into the Consolidated Revenue Fund (5 Marks)

(Total 30 Marks)

Answer

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Tags: Consolidated Revenue Fund, Deficit Financing, Federation Account, Revenue Estimates, VAT
Level: Level 2

Topic: Government Revenue
Series: NOV 2016

PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

Question

The government budget is a plan of government revenues and expenditures for a specified period, usually a year. When budgeted expenditures exceed projected tax revenues, the budget is projected to be in deficit. This will lead to deficit financing.

Required:
Describe briefly FIVE (5) causes of deficit financing.
(5 marks)

Answer

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Tags: Deficit Financing, Fiscal Policy, Government Budget
Level: Level 2

Topic: Overview of the Ghanaian Tax System and Fiscal Policy
Series: MAY 2020

PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

Question

Deficit financing is the budgetary situation where government expenditure is higher than government revenue. It is a practice adopted for financing the excess expenditure with external funding. Most governments both in the developed and developing world are having deficit budgets, and these deficits are often financed through borrowing.

Required:
State FIVE (5) conditions that would make it necessary for a government to support its budget through deficit financing. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Deficit, Deficit Financing, Fiscal Policy, Government Borrowing
Level: Level 2

Topic: Overview of the Ghanaian Tax System and Fiscal Policy
Series: AUG 2022

PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

Question

The Office of the Accountant-General of the Federal Republic of Mazobia presented the following financial data (estimates) concerning the budget for 2017:

Federation Account Budget: N66,955,000,000
Total Value Added Tax Collections: N36,690,000,000
Federal Independent Revenue: N6,380,000,000
Total Expenditure by the Republic: N52,715,000,000

The revenue accruable to the Federal Republic of Mazobia is based on the following revenue-sharing formula among the three tiers of government:

Federal Government: 56%
State Governments: 24%
Local Governments: 20%
Total: 100%

The total expenditure of the Federal Republic of Mazobia is distributable as follows:

Statutory Transfers: 8%
Debt Services: 12%
Other Service-Wide Votes: 6%
Capital Expenditure: 32%
Personnel Cost: 34%
Consolidated Revenue Fund (CRF) Pensions: 3%
Subventions to Parastatals: 5%
Total: 100%

Share of Value Added Tax collections are as follows:

Federal Republic (as collection costs): 15%
State Governments (based on derivation): 50%
Local Governments (based on derivation): 35%
Total: 100%

Federal Republic of Mazobia (FRM) shares its own portion of the Federation Account (56%) as follows:

FRM CRF available for FRM budget: 48.5%
Federal Capital Territory: 1.0%
Share of Derivation & Ecology: 1.0%
Statutory Stabilisation: 1.5%
Derivation of Natural Resources: 4.0%
Total: 56.0%

Based on the available data, you are required to:

b. Calculate the share of Federation Account allocation to the Federal Government among the various beneficiaries (16 Marks)

c. How much of the Federal Government of Mazobia budget will be by deficit financing? (2 Marks)

d. Enumerate any FIVE exclusive Internally Generated Revenue payable into the Consolidated Revenue Fund (5 Marks)

(Total 30 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Consolidated Revenue Fund, Deficit Financing, Federation Account, Revenue Estimates, VAT
Level: Level 2

Topic: Government Revenue
Series: NOV 2016

PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

Question

Required:
Describe briefly FIVE (5) causes of deficit financing.
(5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Deficit Financing, Fiscal Policy, Government Budget
Level: Level 2

Topic: Overview of the Ghanaian Tax System and Fiscal Policy
Series: MAY 2020

PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

Question

Required:
State FIVE (5) conditions that would make it necessary for a government to support its budget through deficit financing. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Deficit, Deficit Financing, Fiscal Policy, Government Borrowing
Level: Level 2

Topic: Overview of the Ghanaian Tax System and Fiscal Policy
Series: AUG 2022

Question Tag: Deficit Financing

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PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

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PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

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PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

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PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

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PSAF – Nov 2016 – L2 – Q1 – Government Revenue

This question focuses on calculating revenue estimates, federation allocation, and deficit financing in a public sector budget.

You're reporting an error for "PSAF – Nov 2016 – L2 – Q1 – Government Revenue"

PT – May 2020 – L2 – Q1b – Public Finance

Describes five causes of deficit financing in a government budget.

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PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

State five conditions that justify deficit financing by the government.

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