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Budget Review 7 things you must know from Terkper's Mid-Year budget review

According to Minister Seth Terkper, Ghana’s economy grew by 4.9% in the first quarter of 2016. This beats the Minister’s own projection for the first quarter and seems to be on track for a targeted  annual growth rate of 4.5%.

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Minister of Finance, Seth Terkper play

Minister of Finance, Seth Terkper

Finance Minister Seth Terkper has delivered the mid-year budget review for the year 2016, and stakeholders in the business and finance sub-sectors of the economy have been paying a keen attention to what is likely to change with earlier projections made in September 2015.

Here are highlights of the figures:

1. GDP Growth-  4.9%

According to Minister Seth Terkper, Ghana’s economy grew by 4.9% in the first quarter of 2016. This beats the Minister’s own projection for the first quarter and seems to be on track for a targeted  annual growth rate of 4.5%.

2. Industrial Sector grew by  1.1%

 Industrial Sector grew by  1.1%evident of the impact of the energy crisis currently bedevilling the country coupled with high taxes and inflated cost of utilities.

3. Services Sector grew by 8.8%

The services sector has led the sectorial growth of the economy, and the mid-year performance of  2016 points to a similar situation where the services sector would record the biggest gain.

It is however, necessary to point out that the banking and telecommunications sector are the biggest boosters of the services sector growth.

4. Agric Sector grew by 2.8%

Poor weather patterns in the first half of the year, with an extended dry season has seen the agriculture sector experience a poor growth rate of 2.8% in the first quarter of 2016.

Predictions of food shortage still loom, as the rains that were expected have not come in the quantities expected.

READ MORE:Supplementary Budget Seth Terkper: accumulation of public debt slowing down

Already, in the first quarter of 2016, food crops like plantains and tomatoes have experienced high scarcity and tremendous increase in prices in the beginning of the year as a result of bad weather conditions.

5. Ghana Cedi depreciated at a rate of 0.2%

The local currency, the Ghana Cedi continued its resilience against major currencies in the country as it did in the last quarter of 2015. Experts say as the apprehension over the restrictions placed by the Central Bank on foreign accounts wears off, exporters and importers have become more confident in keeping their foreign currencies in local accounts, instead of repatriating them abroad.

6. Total Expenditure is $17.6 million out of a target $18.4 million

Government’s expenditure for the first quarter appears to be on target with its expenditure consolidation strategies. The Finance Ministry led by Seth Terkper have stuck with the decision to curtail public spending, withdraw subsidies on fuel and energy prices.

Whether the government will continue the apparent financial discipline by the end of the election year, the 2017 budget statement would reveal.

7. Budget Deficit is 2.5% of GDP compared to a target of 2.2%

Many have argued that the high budget deficit since 2012 has been the biggest undoing of the Ghanaian economy. Government’s budget deficit for 2012 was as high as 12%. Since then the  Finance Ministry has set relatively strict targets for the budget deficits, especially for 2016 where the IMF is overseeing government’s fiscal behaviour. According finance Minister, Seth Terkper, government has exceeded the budget deficit target for the first quarter by 0.3%, given the target 2.2%

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