The amount was 17.1 per cent higher than the outturn for the same period in 2012, the Minister said this when he took his turn at the Meet-The-Press series organised in Accra to explain the performance of the economy.
He said in addition to that an amount of GHC674.8 million had been spent on the clearance of wage arrears.
“The trend in the wage bill for the first eight months of the year is worrying, given that the 10 per cent 2013 wage increment for public sector workers is not reflected in the end of August wage bill,” he added.
Mr Terkper noted that compensation to public sector employees alone continued to take a very significant percentage (about 73.9 per cent as at the end of August) of tax revenue.
That, he noted, resulted in less revenue being available for other important expenditure items under the Goods and Services, as well as Capital components under the budget.
“Together with interest payments, it has also resulted in delays in payments to Statutory Funds and other transfers. Interest payment for January to August totalled GHC2,972.2 million, 40.5 per cent higher than the budget target of GHC2, 115.5 million and 117.3 per cent higher than the outturn for the same period in 2012,” he added.
The Minister said of that amount, domestic interest was 43.6 per cent higher than the budget target and on a year-to-year basis, domestic interest grew by about 133 per cent, reflecting very high domestic borrowing in 2012 to finance the deficit and the high interest rate associated with it.
“The high expenditure on compensation to employees and interest costs, spending on items such as provision of funds for orphanages and other social spending such as school feeding, school uniforms, capitation grants and LEAP, as well as payment to road contractors and other Government service providers had to be curtailed,” he added.