Dr. Ernest Addison
GHANA’s TRADE account has recorded a marginal decline despite recoding a surplus of US$2.63 billion for 2023.
The figure was lower than the US$2.87 billion surplus recorded in 2022.
The decline in the trade surplus, according to the Central Bank, was attributed to a greater decline in export earnings relative to imports.
Bank of Ghana Governor, Dr. Ernest Addison, addressing journalists after the bank’s 116th monetary policy committee meeting recently, said “In the year, merchandise exports declined by 4.9 percent to US$16.6 billion.
Gold exports increased by 15.0 percent to US$7.6 billion benefiting from both volume and price increases.
Cocoa beans exports fell marginally by 1.1 percent to US$1.3 billion on the back of lower volumes and price. Crude oil exports decreased significantly by 29.3 percent to US$3.8 billion driven by reduced volumes and lower prices.
Other exports, including non-traditional exports, also decreased slightly by 1.9 percent to an estimated value of US$3.1 billion.
On the imports side, he said payments were lower by 4.2 percent to US$14.0 billion, driven by both non-oil imports and oil and gas imports adding non-oil imports were estimated at US$9.5 billion, down by 4.6 percent as oil and gas imports also decreased by 3.3 percent to US$4.5 billion.
Gross International Reserves
Gross International Reserves, excluding pledged assets and petroleum funds, reflected a significant build-up of US$2.2 billion at the end of December 2023 to stand at US$3.7 billion. According to Dr. Addison, the build-up was driven mainly by the gold for reserves programme and unwinding of short-term liabilities.
However, the stock of Gross International Reserves ended the year at US$5.9 billion, enough to cover 2.7 months of imports of goods and services, from the stock position of US$6.3 billion (2.7 months of import cover) at the end of December 2022.
He continued that the volatilities that characterised the foreign exchange market in January 2023 dissipated making the Ghana cedi remain relatively stable throughout the rest of the year.
“The stability in the foreign exchange market hinged on improved inflows from the IMF ECF first tranche, the domestic gold purchase programme, remittances, and FX purchases from mining and oil companies, amid monetary policy tightening.
These were further supported by the release of COCOBOD loan facility in December 2023. Excluding the sharp depreciation of 20.6 percent in January, the Ghana cedi cumulatively depreciated by 7.2 percent against the US dollar between February and December 2023.”
Key Export Commodities
On the international markets, the Central Bank Governor stated that prices for the key export commodities traded mixed in 2023 explaining that on a year-on-year basis, crude oil price declined by 5.0 percent to an average of US$77.3 per barrel in December 2023 due to sluggish energy demand in the United States and China, easing concerns on earlier perceptions that tensions in the Red Sea would disrupt supplies.
“Cocoa prices, on the other hand, extended its gains with an annual growth of 66.8 percent to close at an average of US$4,235.60 per tonne, on the back of reduced supplies.
Spot prices for gold also gained 13.3 percent to close at an average price of US$2,035.43 per fine ounce in December 2023, benefitting from the weakened dollar and falling bond yields after U.S. economic data fueled expectations of interest rate cuts in the near term,” he added.
By Samuel Boadi