Bloomberg News

Ghana 2011 Budget Deficit May Be 5%, Standard Chartered Says

October 20, 2011

(Updates with comment in second paragraph.)

Oct. 20 (Bloomberg) -- Ghana’s budget deficit may be about 5 percent of gross domestic product this year as a growing economy helps contain rising debt, said Razia Khan, head of Africa economy research at Standard Chartered Plc.

The government should aim for a lower budget deficit in 2012 to send a “positive signal” to investors, especially given that the West African nation is entering a presidential and parliamentary election year, which raises the possibility of higher spending, she said in an interview after a giving a speech at a conference in Accra, the capital.

“It is encouraging that the West African nation’s rising growth is absorbing increasing public debt, but the government should aim for lower debt ratios,” she said.

Ghana’s tax revenue as a ratio of GDP dropped to 14 percent from 23 percent after the country resized its economy last year saying it was bigger than previously thought, Khan said.

“The average for sub-Saharan African economies is 18 percent,” she said. “Ghana should look at the new economic activities that helped to boost GDP during the rebasing for new tax resources.”

--Editors: Emily Bowers, Karl Maier.

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net.

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net.


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