Journal of Finance and Economics
ISSN (Print): 2328-7284 ISSN (Online): 2328-7276 Website: http://www.sciepub.com/journal/jfe Editor-in-chief: Suman Banerjee
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Journal of Finance and Economics. 2020, 8(1), 6-12
DOI: 10.12691/jfe-8-1-2
Open AccessArticle

Deficit Financing in Ghana and Its Impact on the Economy

Dickson Akoto1,

1Radford University College, Accra, Ghana. P.O.Box AF 4191, Adenta, Accra, Ghana

Pub. Date: January 18, 2020

Cite this paper:
Dickson Akoto. Deficit Financing in Ghana and Its Impact on the Economy. Journal of Finance and Economics. 2020; 8(1):6-12. doi: 10.12691/jfe-8-1-2

Abstract

Deficit financing in Ghana has become an annual phenomenon mainly as a result of the country’s inability to raise enough revenue to finance its budget. This situation has prompted the researcher to assess its impact on the economy. Analysis from the research indicates that Ghana’s budget deficit financing and economic growth are negatively correlated. This implies that deficit financing has had negative impact on Ghana’s economic growth over the research period. The research also showed that budget deficit financing increased in political election years of the country; indicating that over ambitious agenda of politicians is one of the contributing factors of budget deficits in Ghana.

Keywords:
budget deficit surplus economic growth gross national product coefficient of correlation

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