Supplementary Budget out in August to Boost Spending, Growth

By Moses Mozart Dzawu and Ekow Dontoh

Ghana, the world’s second-biggest cocoa producer, is planning a supplementary budget in August to increase government spending, said Fifi Kwetey, deputy minister of finance and economic planning.

“We want to increase allocation to some specific areas of the economy,” Kwetey said by phone today, declining to say how much expenditure will rise. “The intention is to engineer more growth into the economy.”

Africa’s newest oil exporter expanded 23 percent in the first quarter of the year, the Ghana Statistical Service said June 22 after production at the offshore Jubilee oil field began in December. With the inflation rate below 10 percent and the yield on the benchmark 91-day Treasury bill at 10.57 percent, the Ghanaian economy is “stable” enough to handle the extra spending, Kwetey said.

In its 2011 budget issued in November, Ghanaian expenditure was projected to be 12.7 billion cedis ($8.4 billion). Kwetey said the government is aiming to reduce its budget deficit to between 5 percent and 5.5 percent of gross domestic product this year from 6.8 percent last year.

Ghana’s inflation rate declined for the third consecutive month to 8.9 percent in May, from 9 percent in April, the statistical agency said June 15. Daily output from the Jubilee field will increase to 120,000 barrels from next month from 70,000 barrels currently, according to Tullow Oil Plc (TLW), the field’s operator.