Introduction

A critical instrument available to government in the pursuit of the poverty reduction objective is fiscal policy & budgetary allocation and disbursement of budgetary resources. In_recent times, the Government of Ghana adopted the Ghana Poverty Reduction Strategy (GPRS), which serves as the overall framework document for medium to long-term development policy in Ghana. Budget and macroeconomic policies are therefore to be derived from the GPRS. The GPRS is broadly speaking one of the poverty reduction strategy papers demanded by the IMF and the World Bank, which describe the country's macroeconomic, structural and social policies and programmes over a three year or longer horizon to promote broad-based growth and reduce poverty, as well as the associated external financing needs and major sources of financing. The GPRS has poverty reduction as its focus, suggesting that resource allocation within the context of the budget will recognize expenditures that are more likely to have significant impact on the poor or sectors and activities where the poor are expected to benefit most. Reviews of the GPRS indicate that macroeconomic considerations dominated the programme (see Killick and Abugre, 2001).

The budgetary process entails the consolidation of micro-level proposals through consultation with different Ministries, Departments and Agencies (MDAs) in order to produce an aggregate revenue and expenditure projection for the year. Incidentally, there are various obstacles to making the budget system pro-poor. The scope for expenditure analysis may be limited by informational and capacity constraints, or the fractured structure of the budget.