Business News of 2014-04-12

Ghana must live within its means - World Bank

The World Bank is advising the government to deal with the real issues underpinning the poor macroeconomic conditions.
The advise comes on the back of red alerts on the economic downturn that has hit the country. Public debt is on the high, currently at over 55billion cedis.
While most African states are recording a decline in Inflation, Ghana’s inflation continuous to rise, now at 14.5 percent.
The local currency, the cedi, is also ranked as one of the worst performing currencies in Africa, depreciating by 18 percent against the dollar this year alone. Provisional results of the Budget deficit, last year, hit 10.8 percent.
Chief Economist of the World Bank’s Africa Region, Francisco Ferreira says Ghana, like any other state, will have to learn to live within its means.
“Africa Inflation is falling; it is definitely not falling in Ghana. When we talk about fiscal deficit rising across the continent, they certainly have been rising strongly in Ghana.”
According to Ferreira, “a number of decisions taken, including large raises in public sector or so have contributed to a fiscal situation in Ghana that is less comfortable than I think anybody in Ghana would like or we will like. The balance of payment situation in Ghana, where there isn’t an enormous amount of reserves- let’s not sugarcoat things.”
“The macroeconomic situation in Ghana does require attention.”
Francisco Ferreira indicated Ghana’s situation re-emphasizes the need to pay close attention to macroeconomic conditions.
“We must live within our means. Fiscal deficits above 10 percent of GDP are very dangerous and they are particularly dangerous when especially external financing can be challenging," he added.