Ghana's economy will outpace its Nigerian and Kenyan peers this year and next, even though growth is expected to slow from 2011 when the country's first oil fuelled a boom in output, a Reuters poll showed on Tuesday. The West African nation, already a large gold and cocoa producer, started pumping oil from its offshore Jubilee field in December 2010, making it one of the fastest-growing countries in the world as it joined the league of crude oil exporters.
The poll showed Ghana's economy growing 8.1 percent in 2012 then slowing to 7.2 percent in 2012 - still faster than the roughly 7 percent expected in 2012 for Nigeria and 5 percent for Kenya in similar Reuters polls. The Ghanaian economy grew at an annual rate of 12 percent in the third quarter of 2011, slowing from blistering 17.6 percent rate in April-June.
"Growth will be slightly lower but that is natural because it comes from a high base," said Ridle Markus, Africa strategist at Absa Capital in Sandton. The Jubilee offshore oil field is operated by UK-listed Tullow Oil Plc in partnership with state-owned Ghana National Petroleum Corporation (GNPC), US producer Anadarko Petroleum and US public energy firm Kosmos. They had originally aimed for output of 250,000 barrels per day by 2013, which would put them among the world's top 50 producers. But due to delays, production has averaged 80,000 bpd and first phase plateau production of 120,000 bpd is now seen early this year because of underperformance by a major well.
"Despite the delay in reaching peak production levels, the start of production from the Jubilee oil field should continue to help drive strong GDP growth in 2012-13 even if the rate slows compared to 2011," said David Cowan at Citi in a note. Analysts also noted Ghana's public finances are likely to be strained ahead of elections this year, and the government may miss its deficit forecast.
The 2012 budget raises spending by 12 percent to tackle poverty but aims to increase state revenues and narrow the public deficit to 4.8 percent of GDP from an estimated 5.1 percent of GDP last year. But the Reuters poll suggested there will be a budget deficit of 5.5 percentage of GDP this year, narrowing only slightly to 5.4 percent next year.
"We were very concerned that there would be a degree of fiscal overspending ahead of elections in December 2012. The passage of a supplementary budget in late July 2011, augmenting spending further, added to our concern," wrote Standard Bank's Stephen Bailey-Smith in a note. The current account deficit is expected to narrow slightly to 5.7 percent of GDP next year from 6.1 percent this year.