- 10 Marks
PSAF – Nov 2023 – L2 – Q3b – Public sector fiscal planning and budgeting
Compute and interpret financial ratios for government fiscal performance analysis.
Question
Below is an extract of aggregate fiscal data trend for Government of Ghana for the years 2021 and 2022.
| 2022 | 2021 | |
|---|---|---|
| Cash Basis | Actual
(GH¢’million) |
Actual
(GH¢’million) |
| Total Revenue and Grants | 26,824 | 28,865 |
| Taxes | 21,744 | 26,209 |
| Other revenues (Including IGF) | 2,391 | 1,515 |
| Grants | 2,689 | 1,141 |
| Total Expenditure | ||
| Recurrent | 29,276 | 36,795 |
| Wages and Salaries | 12,917 | 14,623 |
| Purchases of goods and services | 1,388 | 3,221 |
| Subsidies and Social transfers | 25 | 0 |
| Grants to other Government units | 4,267 | 5,442 |
| Other non-interest expenses | 1,604 | 1,980 |
| Interest | 9,075 | 11,529 |
| Acquisition of non-financial assets | 7,134 | 7,678 |
| Balance | (9,586) | (15,608) |
Statistical and economic data obtained for the two years are as follows:
| 2022 | 2021 | |
|---|---|---|
| GDP (GH¢’million) | 136,957 | 167,353 |
| Total population (million) | 27.67 | 28.3 |
Required:
i) Compute the following financial ratios for 2022 and 2021:
- Total Revenue to Gross Domestic Product (GDP)
- Wages and Salaries to Tax Revenue
- Fiscal Balance to GDP
- Total Expenditure per capita
- Capital Expenditure to Total Expenditure
(5 marks)
ii) write a brief report interpreting the results of the ratios computed above
Find Related Questions by Tags, levels, etc.
- Tags: Financial Ratios, Fiscal Data, Government Performance, Public Sector Analysis
- Level: Level 2
- Topic: Public sector fiscal planning and budgeting
- Series: NOV 2023
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