Ghana Ministry Says Central Bank Not Printing Money to Pay Debt

Ghana’s finance ministry the central bank didn’t finance the entire budget deficit in the first quarter by printing more currency, denying a report by Fitch Ratings.

“Government will never do that at this time,” Anthony Selom Dzadzra, chief budget analyst at the ministry, said by phone from Tema, a port city east of the capital, Accra. “The Fitch assertion is not accurate.”

Fitch said yesterday that Ghana’s first-quarter budget deficit of 2.1 percent of gross domestic product was financed by the central bank, which provided funding equivalent to 10 percent of government revenue. Printing money to finance the deficit will aggravate already high inflation and contribute to further cedi weakness, the report said. Central Bank Governor Kofi Wampah didn’t immediately respond to a text message.

Ghana’s inflation rate rose for the eighth consecutive month in April to 14.7 percent. The cedi has lost 23 percent against the dollar this year, the worst among 24 African currencies tracked by Bloomberg.

The government is boosting domestic revenue to finance the shortfall, Dzadzra said. Tax revenue by the end of May was short of the target by 7 percent, he said.

“The ministry has put in measures to meet and exceed targets” by year-end, he said.

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