Economist confident Ghana gov’t can reduce deficit

cediA Senior Economist and Researcher with ABSA Capital, on Monday advised the citizenry to exercise patience to allow the stringent measures, promised by Government aimed at reducing the current deficit, to take its course.

Mr Ridle Markus, who gave the advice at the Barclays Africa Economic Outlook event in Accra, expressed optimism that Government could achieve its nine per cent deficit target for 2013.

Government had been heavily criticised over the 12.1 per cent budget deficit for 2012 as against a projected target of 6.7 per cent.

The 2012 deficit had been largely attributed to shortfall in projected revenue and grants received from development partners and payment of high interests in servicing debts on major projects that were not fully funded.

Mr Markus’s optimism stems from the fact that Government had already put in place measures including the Central Bank’s initiative to strengthen the weakening cedi.

Mr Seth Terkper, Minister of Finance had promised that Government had rolled out measures to cut down the deficit.

The measures include moving all government transaction and expenditures to a uniform platform to track these activities, controlling government expenditure and bringing on board liabilities on government’s contract database.

Other methods are effective expenditure control and the use of Ghana Integrated Financial Management System accounts payable module, an electronic platform for procurement, to track expenditures when they incur.

Mr Terkper said the deployment of electronic budgeting module for budget preparation, among other interventions would help in strengthening the fiscal discipline and expenditure management.

He noted that the payment of arrears of the Single Spine Salary Structure contributed towards the deficit, but added that the outstanding debt had been cleared and would not be recurrent.

Mr Markus stressed that Ghana’s large twin deficits could put the cedi under pressure though robust foreign demand at upcoming bond auctions could strengthen the local currency.

He remained confident that if Government worked towards expanding infrastructure, allowed foreign firms to operate in productive sectors of the economy and used the revenue from the oil and gas sector prudently, the Ghanaian economy would grow.

Mr Kennedy Bungane, Chief Executive of Barclays Africa and Head of Africa Group Strategy announced that Barclay’s Plc would combine its operations in Africa.

The restructuring also aims at making Barclays Plc to acquire big portfolio of assets in Africa to boost growth.

ABSA Capital is the investment banking division of ABSA Bank Ltd. It is an affiliate of Barclays, which acquired a controlling stake in the ABSA Group Limited in 2005.

Mr Benjamin Dabra, Managing Director of Barclays Bank Ghana Ltd said at a press conference that the financial institution had done all the paper works necessary for the restructuring to take place and is awaiting the regulatory approval from the Central Bank.

The event which was patronised by some members of the Diplomatic Corps and financial experts, aimed at sharing Barclays Bank’s economic insight at global, Africa and national levels.

Source: GNA

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