Ghana is on track to reduce its budget deficit to 7.5 percent of gross domestic product this year, meeting a target Standard & Poor’s had cast into doubt, the deputy finance minister said.
“There’s a clear austerity program in place that government is following,” Seth Terkper said in a phone interview today from the capital, Accra.
The West African nation’s rating was lowered to B, five steps below investment grade, from B+, S&P said in a statement Aug. 27. The agency cited concerns over large fiscal deficits and a lack of clarity on oil-industry laws. Analyst Ravi Bhatia said Ghana’s budget deficit may be “around 8.5 percent” this year.
In the first half of the year, the deficit narrowed to 3.2 percent, from 4.5 percent a year earlier, Bank of Ghana Governor Kwesi Amissah-Arthur said on July 16.
Laws to regulate Ghana’s nascent energy industry “are before Parliament and they will be passed before oil production begins in December,” Terkper said.
Ghana expects to pump 12,000 barrels of oil a day by 2011 when supplies from its offshore Jubilee oilfield start by the end this year.
