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Ghana

After reading its budget, the government plans a Eurobond road show next week

The government wants to impose higher taxes and borrow more to cut the deficit but controversies swirl over the retirement of the Auditor General and plans for a gold royalties company

In Accra today (12 March), Parliamentary Affairs Minister Osei Kyei Mensah was to set out the details of Ghana's spending and borrowing plans for this year. A plan to have Trade Minister Alan Kyerematen to read the budget was dropped at the last minute. Current Finance Minister Ken Ofori-Atta, whose reappointment by President Nana Akufo-Addo still has to be vetted by parliament, is in the United States on medical leave.

Leading Ghana's attempts to bring down the budget deficit, which stands at around 11.4% of GDP (over double the statutory limit), are plans to raise 5 billion cedis (US$890 million) from new taxes and more efficient collection of old ones. Much of this is to come from taxes on consumption, bank profits and fuel – all likely to work against the attempts to bring down inflation.

With the opposition National Democratic Congress holding the same number of parliamentary seats as the ruling New Patriotic Party, there may strong resistance to these moves.

Opposition MPs are also sceptical of the government's plan to go back to the international markets in search of another 5 bn cedis and its launch of a roadshow, via videolink, next week. It has mandated Bank of America, Citigroup Inc., Rand Merchant Bank Ltd., Standard Chartered Plc and Standard Bank Group as lead managers for the fund-raising. Local institutions including Cal Bank, Fidelity Bank, IC Securities and Databank Group (founded by Ofori-Atta) are listed as co-arrangers of the funding effort.

Other rumbling political fights include the dismissal of the Auditor-General Daniel Yaw Domelevo and President Akufo-Addo's statement that he will take the plan to launch the Agyapa gold royalties company, to be listed in London and Jersey, back to parliament for consultation.

With 16 parliamentary seats still in dispute, the NDC is likely to push hard against the government on all these fronts, convinced that the courts will decide a few more constituencies in its favour in the coming weeks (AC Vol 62 No 5, The wrong side of the law and Vol 62 No 2, Both sides go to court). 



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