This is as the West African country seeks a financial assistance deal with the IMF, Finance Minister Seth Terkper said in his budget speech on Wednesday.
Economic growth will also slow sharply to 3.9 per cent in 2015 from an expected 6.9 per cent this year, Terkper said, a further sign that lower commodity prices and a fiscal crisis are hurting the West African state.
The hoped-for three-year deal with the International Monetary Fund, could be worth up to 1 billion US dollars, government officials have said.
It is aimed at restoring economic stability in a country until recently seen as one of Africa’s star economies due to its political stability and rapid growth through exports of gold, cocoa and oil.
“While we see a bright future encompassing the services, agriculture and industrial sectors we are not yet out of the woods,” Terkper told parliament during a speech that was frequently drowned out by jeering from opposition MPs.
The government will impose a special petroleum tax of 17.5 per cent and continue to freeze hiring of public sector workers as part of its drive to reduce spending and increase revenue, he said.
Ghana’s fiscal crisis has caused the cedi currency to fall more than 30 per cent against the dollar this year and Standard & Poor’s cut the country’s credit rating by a notch to B- last month, expressing doubts about the government’s ability to quickly reduce the high budget deficit.
Terkper said the government will target inflation of 11.5 percent in 2015 and aims to bring the budget deficit down to 3.5 percent of GDP by 2017. Inflation stood at 16.9 per cent in October.
The speech confirmed most of the figures reported by Reuters earlier on Wednesday, citing a senior official.
The major changes were a slightly lower deficit target and a significant reduction in the 2015 growth forecast from 5-6 per cent, an apparent sign that the budget was revised shortly before it was delivered.
The official told Reuters that Ghana aimed to seal a provisional deal with the IMF this week but Terkper did not comment on talks beyond saying that the government was working towards a deal.
Razia Khan, head of Africa research at Standard Chartered bank, said the 6.5 per cent budget deficit target for 2015 was better than market expectations but a debt-to-GDP ratio of over 60 per cent, as of the end of September, was a sign of concern.
“Even factoring in the IMF, Ghana faces a very tough situation. There is no room for slippage on these already pretty stretching targets,” she told Reuters.