Ghana misses budget deficit target

Ghana, a country known for its robust economy, is facing challenges as it missed its budget deficit target in the first seven months of 2016. The government recorded an overall budget shortfall of 3.5% of GDP from January to July, falling short of the target of 3%. John Gatsi, an economist at the University of Cape Coast, shed light on these developments in a recent interview with CNBC Africa. Gatsi expressed cautious optimism about the government's ability to manage the situation, mentioning that the expenditure leading up to the elections was not as frivolous as in previous years. He attributed this change to the presence of the IMF and civil society, which have put pressure on the government to maintain fiscal prudence. Despite the challenges, there is hope that Ghana can showcase its ability to work within the budget even in an election year. When discussing the growth trajectory for the economy, Gatsi acknowledged that several factors, including the energy crisis of 2015, had contributed to a slowdown in growth. However, he highlighted the improvements in the energy sector and the influx of foreign capital as promising signs for future growth. He mentioned the upcoming new oil production and gas projects as factors that could further boost the economy in the medium term. One of the key concerns raised during the interview was the impact of infrastructure strain on productivity. Gatsi pointed out that while investments had been made in infrastructure, their full contribution to the economy had yet to be realized. He emphasized the importance of infrastructure in boosting productivity and expressed optimism that once the investments in the energy sector started bearing fruit, productivity would increase. Despite these challenges, the overall outlook for Ghana's economy appears to be cautiously optimistic. With measures in place to ensure fiscal prudence, improvements in the energy sector, and the expectation of new projects coming online, there is hope for a brighter future in terms of growth and productivity. In conclusion, Ghana's economy may be facing challenges in the short term, but with the right policies and investments, it has the potential to overcome these hurdles and emerge stronger in the long run.