Ghana on track to reduce budget deficit — President Mahama

mahama pixPresident John Dramani Mahama says Ghana is on track to record a budget deficit below its target this year, because of more disciplined government spending.

He said he expected it to fall to 7.2 per cent of Gross Domestic Product, from a target of 7.3 per cent set by the Finance Minister, Seth Terkper last month.

The President was speaking to GBC Radio on a wide range of issues: from youth the economy, strikes among others to commemorate the World Youth Day.

“We have taken some tough decisions. We are seeing a turnaround. The second quarter figures look even better than the first quarter. Fiscal consolidation is taking place,” the President said.

Ghana is battling to jumpstart economic growth because of surging inflation, the highest borrowing costs in Africa and a currency that has whipsawed between the best and worst performer on the continent this year.

Ghana agreed to terms with the International Monetary Fund for a loan of about $1 billion this year to stabilise the currency, which has fallen 18 per cent against the dollar this year, and narrow the budget gap.

He said the country’s currency was stabilising and inflation would slow before the end of the year, pushing borrowing costs lower.

Inflation quickened to a five-year high of 17.9 per cent in July from 17.1 per cent in June, the statistics service said on Wednesday.

“The government has made difficult decisions that were necessary, including ending fuel subsidies,” he said.

He said, “Ghana is coming out of the woods. We are being more disciplined with government expenditure and working to increase revenues.”

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