Ghana’s trade balance declined by 10.7 percent year on year in 2020.
The decline is attributed to the impact of the COVID-19 which disrupted global supply chains and negatively impacted international trade.
The overall trade balance declined to USD 2,015.4 million in December 2020 compared to USD 2,256.8 million recorded in the corresponding month of 2019.
Recent Economic and financial data released by the Bank of Ghana shows that the trade balance was weighed down heavily by crude oil exports which declined by 35.2 percent due to a drop in the price of crude oil as well as a lower demand for oil due to a reduction in economic activities last year.
The trade balance in 2019 accounted for 3.2 percent of the country’s GDP but dropped to 3.0 percent of GDP at End-December 2020.
Despite the decline year-on-year, rebound in economic activities in most parts of the world has trickled down into the Ghanaian external sector with visible improvement in the trade balance at the second half of 2020.
As of the end of March 2020 where the first case of COVID-19 was recorded in the country, the trade balance accounted for 1.3 percent of GDP but gradually improved to end the year at 3.0 percent as travel restrictions were relaxed.
The slow growth in international transactions last year was evident in the lower imports and exports recorded at End-December 2020 compared to the corresponding period of 2019.
Total value of exports dropped 7.8 percent year-on-year in 2020, down from USD 15,667.5 million in December 2019 to USD 14,452.8 million the same month last year.
Similarly, the country’s value of imports also declined to USD12,437.4 million at the end of December 2020 from USD 13,410.7 million in 2019. The reduction in the value of imports by USD 973.3 million during the review period, represents a yearly decline of 7.3 percent over 2019.
The decline in the value of exports by 7.8 percent compared to a 7.3 percent drop in imports put a downward pressure on the trade balance, which resulted in the overall decline recorded last year.
The rebound in economic activity globally, resulted in an increase in the country’s export earnings in the last quarter of last year by USD2,424.5 million, up from USD 12,001.3 million in October to USD14,452.8 million at End-December 2020.
Correspondingly, total imports rose from USD 10,332.3 million in October 2020 to USD12,437.4 million in December 2020.
The performance of the three major export commodities in the country; gold, cocoa, and crude oil were, however, mixed under the review period. The best-performing export commodity was gold which raked in USD 6,799.1 million at End–December 2020 compared to USD 6,229.7 million the same period in 2019.
Similarly, cocoa exports also rose from USD 2,288.4 million in 2019 to USD 2,336.1 million at the end of December 2020.
Conversely, under the review period, Crude oil exports, however, dropped from USD4,493.1million in 2019 to USD2,910.6 million in 2020. Overall, revenues from crude oil exports declined by 1,582.5 million in 2020.
Crude oil exports however picked up gradually after recording the lowest performance in March where the country obtained only USD790.0 million from oil exports.
