ACCRA – Ghanaian Finance Minister Kwabena Duffuor will ask parliament on Wednesday to approve extra spending raising the 2012 deficit target to 6.7 percent of GDP from an initial estimate of 4.8 percent, according to the text of a speech.
The new expenditure comes despite calls by the International Monetary Fund for the West African country to take further steps to stick to its initial deficit plans, but Duffuor said the new target was still in line with IMF accords.
“Whilst the new fiscal deficit target to be financed in 2012 is 6.7 percent of GDP, this is consistent with the deficit target agreed between the Government of Ghana and the IMF,” read the text obtained by Reuters.
Duffuor said the higher deficit was partly due to a “massive final payment” of deferred salary liabilities incurred under a public sector wage reform which has taken the total wage bill from 2.5 billion cedis in 2009 to over six billion in 2012.
Total additional spending for this year will be 2.6 billion cedis, Duffuor estimated. He forecast that Ghana would likely exceed its targets for tax collection for the year as a whole.
$1 = 1.94 cedis
