Bloomberg News

Ghana Economy May Grow 14% on Oil, Risks Deficit, Bank Says

June 30, 2011

(Updates with comment from Diwan in third paragraph.)

June 30 (Bloomberg) -- Ghana’s economy may expand 14 percent this year following the start of oil production for export, said Ishac Diwan, the World Bank’s country director in the West African nation.

The country risks widening its budget deficit amid spending before elections in December 2012, Diwan told reporters in Accra, the capital, today.

“The strong political contention in the country could make ruling parties over-spend before elections,” he said. “Ghanaians must be fiscally responsible to monitor government’s investments, and tame politicians from over-spending especially in areas which would leave big holes in the deficit and shoot inflation upward.”

Ghanaian inflation has slowed since reaching a five-year high of 20.7 percent in July 2009. Consumer prices increased after the government’s fiscal gap widened to 14.5 percent of gross domestic product in 2008, when the last presidential and parliamentary votes were held. In December, Ghana began production of oil for export at the offshore Jubilee field.

A supplementary budget that Ghana’s Finance Ministry will announce in August should focus on spending in areas that will boost growth, Diwan said, without elaborating. Deputy Finance Minister Fifi Kwetey said June 28 that expenditure will rise, without giving details. The country aims to cut its budget deficit to between 5 percent and 5.5 percent, from 6.8 percent in 2010, Kwetey said.

The World Bank’s board of directors is set to decide on a $150 million grant to Ghana’s agricultural industry in September, Diwan said. A program last year to give “technical support” to cotton farmers, including training and better- quality seeds, will yield output of 50,000 metric tons during the harvest that starts in September, he said. Previously, Ghana’s cotton production averaged 5,000 tons a year, Diwan said.

--Editors: Emily Bowers, Ben Livesey.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus