Ghana cuts fuel subsidy over deficit

Fuel prices in Ghana will rise by up to 20 percent after the government announced Sunday that it would cut petroleum subsidies, a controversial move meant to tackle the country's rising deficit. Petrol and diesel prices will rise by 20 percent and kerosene prices by 15 percent, National Petroleum Authority chief Alexander Mould said in a statement. The move comes after authorities announced on Friday that Ghana was running a deficit of 12.1 percent of GDP, nearly twice the government target of 6.7 percent set last July. That prompted ratings agency Fitch to downgrade the country's credit outlook to negative from stable. Ghana spent about $631 million (472 million euros) on fuel subsides last year and was expected to spend $1.26 billion this year before the cut was announced, according to the Bank of Ghana. Fuel prices are a sensitive issue in the region. Nigeria tried to cut its fuel subsidy last year but ultimately backed down after several days of violent protests.