Ghana is on target to halve its fiscal deficit this year after its $918-million aid deal with the International Monetary Fund, Finance Minister Seth Terkper said on Wednesday. His comments appeared designed to allay uncertainty over the deal that emerged this month when parliament rejected a key component that was designed to promote fiscal discipline. The following day the government suspended a planned Eurobond issue.
The government issued a bill to eliminate central bank financing of the budget deficit in line with the requirements of the deal but on August 2 parliament passed the bill with an amendment allowing financing of up to 5 percent. Ghana's public debt eased to 63 percent of GDP in May from 72 percent at the end of 2015, while consumer inflation dropped to 16.7 percent in July from 19 percent in January, Terkper said, citing the impact of the deal that began in April 2015.
The central bank expects inflation to slow to 8 percent, plus or minus two, by September 2017. "We are set to halve the deficit from 12 percent in 2012, and we have also started stemming the rate of growth of the public debt," he told a meeting of private businesses in Accra.