Finance Minister Seth Terkper has indicated that Ghana will miss out on its budget-deficit target for 2016 due to low oil output, high spending on elections and the energy-industry debts.
According to him, Ghana may miss the target of 5.3 percent of gross domestic product by 1.5 to 2 percentage points.
Mr. Terkper, who made the announcement at press conference in Accra, said Ghana’s shortfall in 2015 was 6.3 percent of GDP.
“The higher deficit was on account of FPSO shutdowns resulting in lower crude and gas output,” he said, referring to the outage in the second quarter of an offshore oil field operated by Tullow Oil Plc.
He explained that setting aside extra money for the 2016 elections and the restructuring of debts accumulated by state-owned energy companies were higher than initially planned.
Earlier, the Ghana Association of Bankers said that power utilities had arrears of 2.6 billion cedis ($617 million) of loans when the government started payments.
The budget deficit exceeded 10 percent of GDP from 2012 to 2014.
The cedi weakened 1.8 percent to 4.21 per dollar on December 20, 2016, bringing its loss since January to 5.2 percent.
The yield on Ghana’s dollar bond maturing in 2023 fell one basis point to 8.345 percent.
Ghana’s debt stabilized at between 68 percent and 70 percent of GDP in the past three years while the government won’t draw on any funding from the Central Bank in 2016 in accordance with the IMF’s criteria.
Ghana’s sinking fund, created for the payment of debts, has a balance of $300 million.
Recently, Mr Terkper told the media that the National Democratic Congress (NDC) administration was bequeathing to Ghanaians a well-stabilized economy with bright prospects.
He said his outfit’s fiscal consolidation programme had worked well, resulting in a significant reduction in inflation, a fairly stabilized Ghana cedi and a budget deficit which has reduced from 12 percent to 6.3 percent in 2015.
“Over the last four years, we have been following a path of fiscal consolidation which has led to an economy that has turned around, and the economic indicators point to a clear stabilized economy.”
He said the necessary foundation had been established that expected an economic boom beginning next year only if the new administration would follow the path of fiscal prudence started by the Mahama administration.
“All things suggest that there will not be a reversal of this consolidation,” he said.
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