Flood loss is hundreds of millions of dollars

Ghana will lose hundreds of millions of dollars from the damage of flooding that killed more than 150 people, President John Dramani Mahama said.

“A lot of people lost their personal properties,” Mahama told reporters in the capital, Accra, on Friday. “It also affected a lot of small- and medium-sized enterprises.”

Storm drains and gutters overflowed on June 3 during the heaviest day of rain in six years and dozens of people were killed in an explosion at a gas station where they had taken refuge. The crisis underlined years of shortfalls in infrastructure spending that has failed to keep up with a growing urban population and economic expansion.

The unexpected expense to recover from the disaster will add pressure on the budget deficit, as a drop in oil prices hits state revenue. The government is targeting a fiscal gap of 7.5 percent of gross domestic product from 9.3 percent in 2014.

Last year, the government shelved a $600 million project to improve the city’s drainage network and expand the sewer system. “The problem with the current tightening is do we want to put $600 million on our public debt? I would say not,” Mahama said.

Ghana is borrowing almost $1 billion from the International Monetary Fund in an accord reached this year to help stabilise the economy.

The government also plans to offer as much as $1 billion Eurobonds in a sale that will take place after the IMF conducts a review of the economy this month, said Mahama.

The country has a pledge that the World Bank will guarantee those securities and other bonds with a maturity of 10 years or longer to help bolster its debt offerings, he said.