By Ekow Dontoh
Ghana’s economy may expand by 20 percent this year as the start of oil production for export, along with high prices for cocoa and gold, boost revenue, according to the World Bank.
“First-quarter growth was 23 percent and oil, gold and cocoa have since enjoyed very high prices on the international market,” Dante Mossi, senior operations officer of the World Bank’s office in the West African nation, said in an interview in Accra, the capital, on Sept. 9. “The trend will follow.”
The Washington-based lender’s forecast is higher than its earlier projection of 14 percent, which was made in June and was in line with the Finance Ministry’s own 14.4 percent estimate announced in July.
Ghana became Africa’s newest oil exporter in December, when production began at the offshore Jubilee oil field, which is operated by U.K.-based Tullow Oil Plc (TLW), the explorer with the most licenses in Africa. Gold reached a record $1,921.15 an ounce on Sept. 6 amid uncertainty over the global economic recovery and traded at $1,832.18 an ounce by 10:56 a.m. in London today. Cocoa for December delivery rose for a second day, adding 7 pounds ($11.05), or 0.4 percent, to 1,857 on the NYSE Liffe in London.
Ghana is the world’s second biggest producer of cocoa after Ivory Coast and trails South Africa as the continent’s top gold miner.
More revenue coming into the state’s coffers within 15 months of presidential and parliamentary elections raises concern about government spending, Mossi said. President John Atta Mills will face former Foreign Minister Nana Akufo-Addo, whom he defeated in 2008, in the December 2012 vote.
“It will be sad if the government will collapse all the sacrifices and strong economic confidence gained in four years,” Mossi said.
Ghana’s fiscal deficit widened to 14.5 percent of gross domestic product in 2008, “boosted by strong pre-election spending growth” including gas-price subsidies, infrastructure projects and wage increases for public workers, the International Monetary Fund said in July 2009.
The spending gap narrowed to 6.5 percent in 2010 before Finance Minister Kwabena Duffuor raised the target in July for this year to 5.1 percent from an earlier forecast of 4.1 percent amid plans for spending on roads, schools and agriculture.
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