Masahudu Ankiilu Kunateh
Ghana's total export of crude oil from January to July stood at 12.6 million barrels valued at $1.4billion. But the Institute of Statistical Social and Economic Research (ISSER) warns that increasing oil revenue can derail Ghana's monetary targets, especially the single digit inflation target (8.5%) for 2011, being espoused by the Mills-led government.
ISSER further stressed that, "The year 2011 is a precursor to election year 2012, and political expenditure will begin to rise. If these expenditures are not well managed, the single digit inflation target will be a mirage".
The Legon-based think tank further warns that efforts should be taken to sterilize oil revenue inflows through the creation of an oil revenue management fund.
A Senior Research Fellow of ISSER, Dr. Felix Asante gave the warning at the launch of the state of the Ghanaian Economy Report 2010, and mid-year review of 2011, in Accra, over the weekend.
According to him, unrest in oil producing countries like Libya may continue to drive up the world market price of oil, and this can have severe repercussions on the local economy.
Dr. Asante revealed that the 2011 fiscal outlook for Ghana seeks to continue with the government's policy of reducing the fiscal deficit in the medium term.
Additionally, statistics from the Bank of Ghana (BoG) indicate that overall fiscal operations from January to July 2011, has resulted in a narrow budget deficit of GH Â¢1.12 billion, compared with a target deficit of GH Â¢849.8 million.
This was financed by net domestic borrowing of GH Â¢1.04 billion and net foreign inflows of GH Â¢84.3 million. The net domestic financing represented 92.7 per cent of budgeted target for the period.
The key measures which have been outlined, with the aim of achieving this and other goals, include reforms in public financial management, improvement in tax collection and widening the tax
Giving a background of the reports, the Vice Chancellor of the University of Ghana, Prof. Ernest Aryeetey, a former director of ISSER, paid glowing tributes to all those who contributed in sustaining the economic reports for the past 20 years.
He told the large gathering that the reports have over the years given accurate analysis of the Ghanaian economy.
Prof. Aryeetey used the occasion to encourage corporate Ghana to help the publication of the annual reports, and thanked the World Bank and other civil society organizations for their support.
The President of the Association of Ghana Industries (AGI), Nana Owusu Afari, who chaired the launch, called on government to give more support to the private sector, so as to cushion Ghanaian industries from the effects of global economic challenges.