NewsWest AfricaGhana government says inherits budget deficit "closer to double digits"

Wed,22Nov2017

Posted on Wednesday, 01 February 2017 16:14

Ghana government says inherits budget deficit "closer to double digits"

By Reuters

A budget deficit higher than target will put more pressure on President Nana Akufo-Addo's government to reduce the amount it can spend on job creation. In this photo, avendor prepares packs a small portion of rice for a customer at the Agbogboloshie food market in Accra, Ghana. Photo: OLIVIER ASSELIN/AP/SIPAGhana's new government has inherited a budget deficit "closer to double digits" as a percentage of GDP than the 5% targeted for 2016 by the previous government, Finance Minister Ken Ofori-Atta told Reuters on Wednesday.

The issue is politically sensitive because Ghana is following a three-year, $918m International Monetary Fund programme aimed at stabilising the economy after the deficit ballooned during the previous election year of 2012.

The Fund and the government of former President John Mahama said during 2016 they would respect budgetary targets, although ahead of the December election ministers said the deficit might stand at 7% of gross domestic product.

Unchecked overspending and decreased revenue

"I suspect that it's certainly closer to a double-digit deficit. This is what we are confronting," Ofori-Atta said.

The overrun was due to "unchecked overspending" and decreased revenue, he said.

A budget deficit higher than target will put more pressure on President Nana Akufo-Addo's government and reduce the amount it can spend on funding programmes for job creation and poverty reduction.

The government also inherited a debt from state-owned enterprises and government ministries of at least $1.6 bn, Ofori-Atta said, adding that Ghana will aim for double-digit growth economic but not this year.

 



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