Ghana Holds Benchmark Interest Rate at 15 Percent

Ghana’s central bank left its benchmark interest rate unchanged for a third meeting as election-related spending added to pressure on inflation.

The Bank of Ghana maintained the policy rate at 15 percent, acting Governor Kofi Wampah told reporters in Accra, the capital, today. That was in line with a forecasts of four out of seven economists surveyed by Bloomberg. The rest predicted a cut of between a half and one percentage point.

The budget deficit in West Africa’s second-biggest economy soared to 7.3 percent of gross domestic product in the first nine months of 2012 from 1.9 percent a year earlier. President John Dramani Mahama won the Dec. 7 election, while his ruling National Democratic Congress party held its Parliament majority.

“Given that Ghana held an election, the general expectation is that there may have been some fiscal overruns,” Razia Khan, head of Africa economic research at Standard Chartered Plc. in London, said in an e-mailed response to questions before the rate decision. Possible cuts in fuel subsidies and the rebasing of inflation data indicate “there is little to be gained from an early easing.”

The government may scrap fuel subsidies, according to the National Petroleum Authority, which regulates Ghana’s downstream industry. The cost of the caps is expected to climb to 2.4 billion cedis ($1.3 billion) this year from about 1 billion cedis in 2012, Alexander Mould, the NPA’s chief executive officer, said on Feb. 11.

Cedi Stabilizes

The inflation rate was unchanged at 8.8 percent in January, the Ghana Statistical Service said today.

The central bank increased its key rate by 2.5 percentage points last year and boosted Treasury-bill sales to help stabilize the cedi, which fell 14 percent against the dollar in 2012, making it Africa’s second-worst performer. The currency has gained 0.2 percent so far this year.

The economy grew at its slowest pace in almost six years in the third quarter, expanding 1.7 percent compared with 3.2 percent in the previous three months, the statistics office said on Jan. 9. Ghana is the world’s second-largest cocoa producer and the continent’s No. 2 gold miner.

To contact the reporter on this story: Pauline Bax in Accra at

To contact the editor responsible for this story: Nasreen Seria at

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