Ghana’s budget deficit last year was wider than the government originally forecast because of a decline in tax revenue and higher spending on wages, a finance ministry document shows.
The gap is 10.8 percent of gross domestic product, wider than the 10.2 percent estimate presented in the November budget, the finance ministry document, which was obtained by Bloomberg News, showed. Minister of Finance Seth Terkper didn’t immediately answer a call or return a text message to his mobile phone for comment.
West Africa’s largest economy after Nigeria is struggling to contain a government worker wage bill that consumes 70 percent of tax revenue as the price of gold, the country’s biggest export, dropped last year for the first time in more than a decade.
Ghana’s fiscal gap will probably remain above 10 percent for a third year in 2014, putting pressure on the nation’s rating, Moody’s Investors Service said in a note on Feb. 14. Fitch Ratings cut Ghana’s credit rating by one level to B, five below investment grade, in October.
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