ACCRA Feb 14 Ghana's new finance minister, Seth
Terkper, said on Thursday his 2013 budget statement would aim to
rein in spending after the country overshot its budget deficit
target for the previous year by almost 100 percent.
The cocoa, gold and oil exporting West African country's
2012 deficit hit 12.1 percent of gross domestic product (GDP),
almost double its target of 6.7 percent, the central bank
reported on Wednesday.
Terkper, who is expected to present his first budget to
parliament in early March, would not indicate where he would set
the deficit target for 2013, but said it would be much lower
than the level reached in 2012.
"For now I can say that the government has taken an economic
and fiscal stance to tackle the fiscal challenges that led to
the deficit overrun and I am optimistic that we will not
experience those slippages in 2013," he told journalists.
Terkper, who served as deputy finance minister for four
years, said payments of larger-than-estimated public sector wage
arrears and fuel subsidies largely accounted for the deficit
overshooting targets in 2012.
There was also a significant shortfall in expected corporate
income tax from petroleum companies, after production problems
meant they did not meet revenue targets, he added.
"The (wage) arrears payment has taken a toll on the budget
beyond what the government had programmed - the fuel subsidies
have also widened year after year," he said.
Terkper said the government was currently weighing the
options for a possible reduction in fuel subsidies but said no
decision had yet be taken.
Fuel subsidies for last year totalled one billion cedis
($526 million) and were expected to rise to 2.4 billion cedis
"It is not going to be an austere budget - it is not going
to be painful but at the same time, we are not going to repeat
some of the mistakes," Terkper said.
He said the government would continue to issue short- and
medium-term bonds as source of funding for capital projects, in
addition to accessing loan facilities from China and other
Ghana's overall balance of payments recorded a deficit of
$1.2 billion in 2012, reversing a surplus of $546.5 million in
(Reporting by Kwasi Kpodo; Editing by Sophie Hares)