Ghana's risk outlook has improved. Public finance
management, perennial achilles' heel for the
country is increasingly tight. International donors
are back on board. The ICT sector, which is slated
to benefit from additional spectrum licensing,
looks especially interesting. Financial services
also. Power sector and export-oriented activities
have been singled out for special incentives/other
official support.
Ghana's 2015 Mid-Year Budget Review
A Difficult Year
Sticky wages, anaemic demand at home
and abroad, alongside reticent donors
kept Ghana from its government-set
macroeconomic targets. Worse still,
public debt grew by 52%, the Cedi lost
27.6% against the USD and 24.5%
against the GBP.
It wasn't all bad news however. The current
account deficit shrank from 12 to 9% of GDP,
and there were bright spots in the economy,
ICT and Finance especially.
The administration is much more confident looking
forward and had some good stats from Jan to May
2015 to back it up: (a) budget deficit better than
target for the period, (b) 4.7% GDP growth y/y, (c)
41.5% growth in donor disbursements, (d) strong
currency gains after a choppy start to the year, and
(d) ICT continues to outperform all others
ICT
sector
grows
38.4%
Financial
services
by
22.9%
A Better BeginningCategories Values
Services 51.9
Industry 26.6
Agric 21.5
Ghana GDP by Sector, %
Nevertheless, the country has not yet turned
the corner on its macroeconomic crisis. Public
debt hovers in worrying territory, the balance
of payments and currency stability are still
threatened by volatile commodity prices, and
it's too early to say how deep improvements in
public financial management go.
5
2.5
7.5
10
Year
Values
0
Wages
Capital
4.1
2.3
2013
3.1
2.0
2014
Key Public Spending. USD Bil
Only
1.9%
of
GDP
Cash
Deficit
IMF
gives
BoP
support
and
a
good
report
Revised
2015
Targets:
GDP
Growth:
3.5%
Headline
InflaMon:
13.7%
Budget
Deficit:
7.3%
of
GDP
InternaMonal
Reserves:
3
Months
Import
Cover