Fiscal Reins

Ghana's fiscal finances deteriorated markedly in 2008, with the fiscal deficit having swelled to an estimated 14.9% of GDP, from 5.1% in 2007. Given the high costs associated with financing debt at present, we believe the authorities will reduce spending in 2009, and forecast a 5.0% y-o-y decline in fiscal expenditure. Corroborating our forecasts, Ghana's new president, John Atta Mills stated in mid-February that his government will slash costs on expenses including protocol, seminars and possibly presidential jets as well.

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