Ghana's 2015 mid-year economic growth to decline

Ghana is to expect a decline in economic growth from an estimated 3.9 percent to 3.5 percent over the next six months, Finance Minister Seth Terkper announced in Parliament on Tuesday.

The country’s 2015 targeted budget deficit will increase from 6.5 percent of Gross Domestic Product (GDP) to 7.3 percent, with an upsurge in inflation from 11.5 percent to 13.7 percent.

Presenting a midyear review of the budget statement and economic policy and supplementary estimates for the 2015 financial year, Mr Terpker said government was fixed on transforming the economy despite challenges with macroeconomic stability.

He said measures had been put in place to maintain recent gains, with short term and structural elements to rope in high foreign-financed capital expenditure, rising inflation, the impact of gold and cocoa prices, revisions in the benchmark crude oil prices and the refinancing of existing debt stock.

The Finance Minister told the House that owing to current IMF relief facility and ongoing prudent fiscal consolidation measures, the country was set on the path of growth, with significant progress in policy encompassing the strategic areas of power, debt management, export-led growth and infrastructural development.

He said in near term, Ghana’s access to oil and gas revenues will fast track the achievement of an all-encompassing inclusive growth, by facilitating further investments in, and integration with, downstream energy, agriculture and services sector.

But the Minority in Parliament at a press conference immediately after the mid-year budget review statement, said they were pessimistic about the measures government was taking, adding that those steps would rather plunge the country into recession.

Dr Anthony Akoto Osei, Ranking Member of Finance who led the reaction, said the measures the Ministry was pursuing though positive in outlook, were not realistic because they were not addressing the fundamental challenges of the economy.

“We have a long way to go and the impression is being created that we are out of the woods. We should not be in a haste to make conclusions that the economy is on track because the outlook is shaky. “

He said important indicators like inflation, energy and bank rates had all not seen reductions, indicating that the measure government is taking is not having the right effect on the economy.

Dr Osei said the daily injection of 20 million dollars to stabilize the cedi was not sustainable as it would deplete the country’s reserves, advising that government should rather leverage on the country’s oil revenue to boost sectors of the economy that promote long-term growth like agriculture.

He said government should look to stimulating industry and stop competing with industrialist for capital on the local market.

“The nation is getting too steep into borrowing, and that shows the nation is losing hold on its financials”, Dr Osei declared.