The Finance Minister Mr Seth Terkper has disclosed that the country will miss its budget deficit target for 2016 because of disappointing oil output and higher-than-expected spending on elections and energy sector debts.
He said the country will also miss its fiscal shortfall aim of 5.3 percent of gross domestic product by 1.5 to two percentage points.Shortfall in 2015 was 6.3 percent of GDP, he said.
Speaking to reporters on Tuesday the Finance minister said: “The higher deficit was on account of FPSO shutdowns resulting in lower crude and gas output,” he said, referring to the outage in the second quarter of an offshore oil field operated by Tullow Oil Plc.
Setting aside extra money for the 2016 elections and upfront payments for the restructuring of debts accumulated by state-owned energy sector companies were higher than initially planned, he said. Power utilities had arrears on 2.6 billion cedis ($629 million) of loans when the government started payments, according to the Ghana Association of Bankers.
The country’s debt stabilized at between 68 percent to 70 percent of GDP in the past three years while the government won’t draw on any funding from the central bank in 2016, in accordance with the IMF’s criteria, Terkper said.
Ghana’s sinking fund, created by Terkper for the payment of debts, has a balance of $300 million, Deputy Finance Minister Cassiel Ato Forson said at the same event.
By Fiifi Abdul Malik
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