Ghana cut its estimate for economic growth in 2014 to 4.2 percent as the currency weakened and power cuts hurt output.
Projected growth in West Africa’s second-biggest economy was lowered from a 6.9 percent estimate in October, Baah Wadieh, a senior official at the Ghana Statistical Service, told reporters today in the capital, Accra. That compares with an expansion of 7.3 percent in 2013. The government has also cut its growth forecast for 2015 by about half, to 3.9 percent.
Soaring inflation and chronic power shortages are holding back investment in Ghana, the world’s second-largest cocoa producer. The cedi plunged 26 percent against the dollar last year, the worst performer among more than 30 African currencies tracked by Bloomberg, as authorities failed to rein in the budget deficit and the nation’s debt was downgraded.
“We have seen significant impact on industry in 2014 due to the depreciation of the cedi,” Sampson Akligoh, managing director of Accra-based InvestCorp Ltd., a money manager, said by phone. “The revision of 2014 growth basically captures that.”
‘Little Room’
The state-owned electricity company has cut power to residential neighborhoods in the capital for up to 12 hours several times a week, and included industrial zones in the planned outages last month. Inflation was unchanged at 17 percent in December.
The government is seeking as much as $1 billion in loans from the International Monetary Fund to help bolster the economy.
The economy grew 5.1 percent in the third quarter of last year, picking up from a revised 1 percent in the previous three months, Wadieh said.
There’s “little room for an expansionary policy” this year as the government focuses on “building fiscal buffers,” Akligoh said.
Credit: Bloomberg