Ghana’s economic growth rate will probably more than double within four years as the West African nation reduces its budget deficit, Finance Minister Seth Terkper said.
Expansion is expected to remain stuck at an almost two-decade low this year, at 3.9 percent, before accelerating to between 8 percent and 9 percent by 2019, Terkper told reporters on Wednesday in the capital, Accra.
“What we have for the medium-term is a return to growth,” he said. “The period of fiscal consolidation is going to go into a period of bright prospects for the country.”
Ghana’s economy grew 4 percent last year, the slowest pace in 20 years, as a cash crunch forced the government to limit spending and power outages curbed output. Authorities concluded an agreement with the International Monetary Fund in April for $918 million in emergency loans to help finance the budget and bolster the cedi after it fell to a record low.
Terkper said the budget deficit will narrow to 2 percent to 4 percent of gross domestic product in the medium term. The shortfall is projected by the government to reach 7.5 percent of GDP this year, down from 9.3 percent in 2014.
The state’s finances will improve after most of the arrears for wages and capital investment were cleared last year, Terkper said. A fund will be created this year to help pay for the annual interest on government debt, he said.
The cedi fell 1.4 percent to 4.03 per dollar as of 2:34 p.m. in Accra, extending its decline since the start of the year to 20 percent in the worst performance in Africa.
Growth in West Africa’s second-biggest economy will also be supported when new oil fields begin production next year, Terkper said. Ghana will use the proceeds from crude sales and increased donor inflows to help address the power shortages, he said.