Lowering budget deficit in Ghana sustainable: central bank governor
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E-mail Xinhua, November 15, 2012
Acting governor of Ghana's central bank Henry Kofi Wampah expressed confidence here Wednesday that lowering government budget deficit could be sustained over a long period.
Since the major causes of the current budget deficit were almost over, he said, the projection of a lower, single-digit budget deficit would be achievable from 2013.
The governor told the media the execution of the budget for the first three quarters of the year had resulted in an overall budget deficit of 5.1 billion Ghana cedis or 2.6 billion U.S. dollars, representing 7.3 percent of gross domestic product (GDP) against a target of 4.3 billion Ghana cedis or 6.2 percent of GDP.
The excess, he said, was mainly accounted for by the implementation of the country's pay rationalization policy, dubbed Single Spine Salary Structure (SSSS), and arrears clearance which amounted to 1.1 percent of GDP, against an overall budget deficit of 1.9 percent of GDP for the same period in 2011.
Wampah believed that with the implementation of the SSSS at its tail end, and over 90 percent of the arrears paid out, the type of pressure that bore on government's fiscal policy this year would have eased by next year, making way for lower budget deficits.
However, he warned that the government would have to maintain fiscal discipline for this to be achieved.
At the end of September 2012, Ghana's public debt stood at 29.6 billion cedis (15.6 billion dollars) or 44.7 percent of GDP, compared with a stock of 23.9 billion cedis (12.6 billion dollars) or 42.6 percent of GDP in December 2011.
The current government inherited a budget deficit of 14.5 percent when it took power in January 2009 but has been working consistently to maintain a tight fiscal regime to ensure low budget deficits.
Earlier this year, late President John Evans Atta Mills, in his quest to ensure fiscal discipline, sent a strong memo to all ministries, departments and agencies that the government would not tolerate any "unbudgeted expenditure and overspending this year".
This was apparently in response to calls made earlier that steps be taken so that the election year syndrome of fiscal slippage did not take place this year. Endi
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