Ghana cuts 2022 growth forecast, sees smaller deficit

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ACCRA — Ghana’s government said on Monday it had lowered its 2022 economic growth forecast but the budget deficit to be smaller than previously, as it negotiates a support package with the International Monetary Fund.

The West African gold, oil and cocoa producer changed its mind and turned to the IMF earlier this month after hundreds took to the streets to protest against mounting hardship. Analysts say Ghana is on the brink of a debt crisis.

Finance Minister Ken Ofori-Atta said in a mid-year budget statement that the economy was now projected to grow 3.7% this year, compared to the 5.8% seen when the 2022 budget was presented in November.

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This year’s budget deficit is now forecast at 6.6% of gross domestic product compared with 7.4% previously, and year-end inflation at 28.5% up from 8%.

“Our decision to go to the IMF again, despite what we had determined earlier, is a short-term measure for balance of payment support,” Ofori-Atta said in parliament.

Amid soaring food prices, which were up over 30% in annual terms in June, Ofori-Atta said officials would place a temporary ban on maize, rice and soya exports to ensure food security.

He said the government would stick to the 2022 budget appropriation, balancing a windfall from the oil sector with underperforming revenues.

After Ofori-Atta finished his speech, opposition lawmakers banged their tables and chanted, “Resign!”

Earlier on Monday, Ghana’s central bank kept its main lending rate unchanged at 19.0%, pausing to observe the impact of earlier rate hikes and citing growth concerns. (Additional reporting by Bate Felix in Dakar Writing by Alexander Winning Editing by Estelle Shirbon/Mark Heinrich)