Ghana’s Duffuor Says Oil Output May Boost Economic Growth

Ghana’s Duffuor Says Oil Output May See Growth Beat Forecast
Since Aug. 1, the cedi has gained 3.2 percent, the second-strongest in the period among 22 African currencies tracked by Bloomberg. Photographer: Issouf Sanogo/AFP/Getty Images

Ghana’s economy may expand 9 percent this year, beating a forecast from the government’s statistics agency, as oil production increases and the cedi strengthens, Finance Minister Kwabena Duffuor said.

“Oil production has picked up, we are now making almost 90,000 barrels a day,” he said in an interview in the capital, Accra, on Oct. 12. “The macro-economic situation is very strong.”

If the forecast is attained, it will be faster than the Ghana Statistical Service’s provisional outlook of 7.1 percent annual growth, a figure projected last month, and closer to the ministry’s initial expectation of 9.4 percent made in its budget for the year in November.

The start of oil exports in late 2010 helped propel growth in Ghana, the second-biggest economy in West Africa, to 14.4 percent in 2011, the fastest pace on the continent. Output from the Jubilee field fell in the first half of this year to an average of 63,000 barrels a day, according to the Bank of Ghana.

Ghana’s budget deficit and inflation goals remain within reach, even as the country heads to presidential and parliamentary elections in December, Duffuor said. The domestic currency weakened 16 percent in the first seven months of the year as the growing economy boosted demand for imports and foreign currency. Since Aug. 1, the cedi has gained 3.2 percent, the second-strongest in the period among 22 African currencies tracked by Bloomberg. It weakened less than 0.1 percent to 1.8935 a dollar by 10:01 a.m.

Attain Targets

“The depreciation was very fast but now we have taken control of the economy,” Duffuor said. “Election or no election, the cedi will appreciate and we will attain our deficit target and inflation will remain in a single digit.”

Ghana’s inflation rate fell for the first time in seven months to 9.4 percent in September from 9.5 percent in August, the statistics agency said on Oct. 10. Duffuor raised the budget deficit target to 6.7 percent of gross domestic product from 4.8 percent in July amid plans to spend more on civil-servant wages.

The Bank of Ghana kept its benchmark interest rate unchanged at 15 percent last month after three increases this year helped halted the cedi’s slide against the dollar, along with measures to sell more local-currency Treasury bills and a directive to banks to hold reserves in cedis.

President John Dramani Mahama, who came to office following the July death of John Atta Mills, faces opposition leader Nana Akufo-Addo, whom Mills defeated in 2008 by less than 1 percentage point. Mahama’s ruling National Democratic Congress will also bid to retain control of Parliament on Dec. 7.

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