Accra - Ghana has put on hold plans to introduce a windfall tax on mining profits, Finance Minister Seth Terkper told Reuters, a move that will delight struggling gold firms but could undermine efforts to reduce the country's budget deficit.

“It's on hold in parliament and we are consulting,” Terkper told Reuters late on Thursday.

He had told parliament during the annual budget in November that the government would impose the tax.

No timeframe was given at the time.

Ghana is Africa's second-biggest gold producer.

The precious metal is a large source of revenues for the country whose government is seeking to maintain rapid economic growth while re-establishing macro-economic stability.

President John Mahama said this week that his country had come under pressure from the industry over the planned tax, with companies warning that it would lead to job cuts.

“They (mining firms) won't allow us to implement the windfall tax in our country,” Mahama said at the World Economic Forum in Davos, Switzerland, on Wednesday. - Reuters