Ghana’s economy is set to take a further hit as its growth was lowered 0.9 percent while its budget deficit is expected to more than double, Finance Minister Ken Ofori-Atta said.
These projections are as a result of a fall in oil prices and the effects of the COVID-19 pandemic which has affected several aspects of the economy locally and internationally.
Ofori-Atta was presenting a mid-year budget review to parliament in the capital Accra.
The forecast is grim reading for Ghana which had recorded GDP growth of at least six percent for the last three years and was expected to keep its budget deficit below five percent for a third year.
Ghana’s budget deficit will be more than double the initial forecast as the drop in oil prices and the coronavirus pandemic weigh on state income and economic growth.
According to Ofori-Atta, the doubling of the budget deficit is calculated at 11.4 percent of gross domestic product compared with a projection of 4.7 percent at the end of 2019. Economic growth was predicted to be at 6.8 percent this year and was subsequently revised to 1.5 percent in March with the onset of the coronavirus pandemic.
The pandemic has also reversed some fiscal gains made under an International Monetary Fund program that ended in April 2019, Bloomberg reported.
The African Development Bank (AfDB) had said in a report that African countries which were dependent on tourism and oil exporters were expected to be the hardest hit by the COVID-19 pandemic.
Ghana produces about 200,000 barrels of oil per day.