Ghana to keep tight grip on spending ahead of election

February 25, 2016 2:32 PM

During the previous election in 2012, hikes in civil service wages caused the deficit to mushroom, triggering a fiscal crisis that the government is still working to overcome with the aid of an International Monetary Fund programme.

President John Dramani Mahama of Ghana addresses attendees during the 70th session of the United Nations General Assembly at the U.N. headquarters in New York, September 30, 2015. REUTERS/Carlo Allegri

Ghana's government will not repeat mistakes made during the last election and will maintain strict fiscal discipline ahead of the 2016 vote, President John Mahama told parliament in an annual State of the Nation address on Thursday.

Mahama, who is seeking a second term, faces a tough battle against opposition leader Nana Akufo-Addo during presidential elections scheduled for November. Some economists are warning the government not to overspend in a bid to win victory.

That crisis, coupled with a fall in global commodity prices, has sharply slowed growth in Ghana. Its economy is based on exports of gold, cocoa and oil and for years it was considered one of Africa's most promising.

Power generation will likely be another critical election issue, after years of crippling blackouts that have hurt businesses and angered voters.

Mahama said Ghana has added power generation capacity more quickly in the past year than at any time in its history, but said it must act quickly to match demand growth and ensure sustainable power supply.