Oil will help raise Ghana’s economic growth rates to 20 percent next year, the deputy governor of the central bank said, hinting at further interest rate cuts so long as inflation continued to fall.
Ghana is due to join the club of oil-producing nations later this year, with a planned fourth quarter first oil shipment from the 800 million barrel Jubilee field set to have a rapid impact on the economy.
“This is the best estimate that our forecasters have come out with,” Millison Narh said of the 20 percent estimate in an interview with Reuters Insider TV on the sidelines of an investors’ conference in Accra.
Earlier at the conference, Narh said 2010 economic growth was seen at 6.5%, a slight upwards revision from earlier official forecasts of just below six%.
A Reuters poll in January showed that Ghana’s economy could grow at 14.7% in 2011, one of the world’s fastest growth rates, boosted by oil production of oil.
Since coming into power last year, President John Atta Mills’ government has managed to get a grip on stubbornly high inflation, which had hovered over 20 percent for months but fell in March for the ninth consecutive month.
The March figure of 13.32% is still above the year-end target of 9.2-11.2%, but the Bank of Ghana lowered its prime rate by 100 basis points to 15% on April 16.
Asked if there would be more rate cuts, Narh said: “To the extent that the disinflation process continues that will definitely also follow but it has to be coupled with the caveat that there are risks that we are watching.”
Among those risks, he cited the impact of crude oil prices on past inflation trends.
However, Narh said he was confident inflation would continue on “a downward path” in 2010.
Ghana is hoping oil will transform its aid-dependent economy, rather than turn into a curse, as it has in other countries that have often seen public spending sprees, a spike in corruption and insecurity.