Ghana

Ghana’s president has blamed the country’s economic malaise on government overspending just as the bottom fell out of the market for its main commodity exports, the Financial Times reported. In a reversal of fortunes that provides a cautionary tale for other natural resource-dependent emerging nations, John Mahama said “wage overruns” — a reference to public sector salaries that accounted for 72 per cent of government expenditure in 2012 — and huge energy subsidy bills fuelled the fiscal deficits that crippled Ghana’s economy.

Ghana Finance Minister Seth Terkper said that the country wants to sign an agreement with the International Monetary Fund as soon as possible, helping reduce borrowing costs for the government, Bloomberg News reported yesterday. Slumping gold and cocoa prices eroded steps taken to narrow the budget gap and made targets to cut the deficit “too ambitious,” Terkper said. The IMF program will include support for balance of payments, he said.

Ghana’s central bank is printing money to help finance the government’s budget deficit, threatening to fuel inflation and weaken a currency that’s already the worst performer in Africa this year, Bloomberg News reported. The 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,” Carmen Altenkirch, an analyst at Fitch in London, said in an e-mailed statement today.