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Ghana Says Fitch View on Budget-Deficit Measures ‘Questionable’
 
Posted on: 02-Dec-2013         Source: Bloomberg
 
 
 
Ghana has made progress addressing its budget deficit and is curbing costs that led the government to miss its target for the fiscal gap this year, the Ministry of Finance said.

The government will not take abrupt steps to curb spending because it would affect the medium-term growth outlook, the Accra-based ministry said in an e-mailed statement today. Fitch Ratings’ statement on Nov. 25 that the nation’s creditworthiness is eroding is questionable, the ministry said.

“Ghana does not wish to adopt abrupt measures that will affect the medium term growth prospects of the economy,” according to the statement. “We disagree with Fitch Ratings’ position that the consolidation of fiscal measures announced in the budget will not effectively address the Ghana fiscal challenges experienced in the past two years.”

Ghana will probably overshoot its budget-deficit target of 8.5 percent next year as the West African nation is struggling to rein in spending, Fitch said Nov. 25. Fitch last month downgraded Ghana’s credit rating by one level to B from B+.

Finance Minister Seth Terkper pledged on Nov. 19 to narrow the budget gap from an estimated 10.2 percent this year by boosting revenue and tax collection.