The Bank of Ghana (BoG) has stated that Ghana’s economic resilience was evident in the first half of 2024, marked by a robust reserves position and a growing trade surplus.
According to the Bank of Ghana, the country’s gross international reserves reached $6.865 billion in June 2024, reflecting a significant increase from $5.344 billion during the same period in 2023. This improvement underscores Ghana’s ability to maintain financial stability amid global economic uncertainties.
The $275 million rise in gross international reserves not only highlights the effectiveness of Ghana’s monetary policies but also reinforces its financial security. These reserves now provide 3.1 months of import cover, a critical measure for assessing a country’s ability to sustain imports in the event of economic disruptions.
The Gross International Reserves, excluding encumbered and petroleum assets, also showed an uptick, increasing to $4.522 billion in June 2024 from $4.32 billion in April 2024.
Despite these gains, the net international reserves were slightly lower, recorded at $4.500 billion compared to $2.332 billion a year ago. This discrepancy can be attributed to various financial commitments and obligations that offset the gross reserves.
In tandem with the strong reserves position, Ghana’s trade balance posted a higher surplus of $1.805 billion for the first half of 2024, compared to $1.602 billion in the corresponding period of the previous year. This positive trade balance indicates that Ghana is exporting more than it imports, a favorable scenario for any economy as it helps in accumulating foreign exchange reserves and reducing external debt.
Surge in Export Earnings
Meanwhile, a significant driver of the increased trade surplus was the substantial growth in total exports, which rose by 13.33% year-on-year to $9.22 billion in June 2024. This surge was primarily fueled by a remarkable increase in gold exports and a modest rise in crude oil exports.
Gold exports saw an impressive 46.3% year-on-year increase, earning $5.041 billion by June 2024. The global demand for gold, coupled with favorable market prices, played a crucial role in this upsurge. Crude oil exports also contributed positively, with earnings rising by 19.38% to $1.981 billion. This increase was driven by both higher export volumes and improved pricing in the international markets.
However, not all sectors experienced growth. The export of cocoa, both beans and products, experienced a significant decline, dropping by 47.7% to $760 million in June 2024. This downturn can be linked to various factors, including fluctuations in global cocoa prices, changing weather patterns affecting production, and possibly higher competition from other cocoa-producing countries.
Other exports, including non-traditional exports, also saw a slight decrease, totaling $1.445 billion in June 2024. These non-traditional exports encompass a variety of goods and services outside the primary export commodities like gold, crude oil, and cocoa. The slight reduction indicates challenges in diversifying Ghana’s export portfolio and highlights areas needing policy attention to boost non-traditional export growth.
On the import side, Ghana’s total imports increased to $7.423 billion in June 2024 from $6.538 billion in June 2023. This rise in import expenditure reflects the country’s growing demand for foreign goods and services, which, while indicative of a vibrant economy, also emphasizes the need for balancing trade dynamics to avoid potential trade deficits.
The increase in gross international reserves and trade surplus signals a strong economic footing, while the challenges in cocoa and non-traditional exports highlight areas for strategic policy interventions. As Ghana circumnavigates the difficulties of the global economy, sustaining and enhancing these positive trends will be crucial for long-term economic stability and growth.
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