Ghana’s stock of Gross International Reserves declined to US$6.6 billion, equivalent to 2.9 months of import cover for goods and services in September 2022.

This compares with the December 2021 position of US$9.7 billion which was equivalent to 4.3 months of import cover.

According to latest Summary of Economic and Financial Data released by the Bank of Ghana, Net International Reserves, which excludes encumbered assets and petroleum funds, is estimated at US$2.7 billion as at September 2022.

From the beginning of the year to September 2022, the Ghana Cedi has depreciated by 37.5 percent, 24.1 percent, and 27.5 percent against the US dollar, the pound and Euro, respectively.

In comparison with the same period of last year, the Ghana Cedi fared better, depreciating by 1.8 percent and 0.5 percent against the US dollar and the pound, respectively, and appreciated by 4.0 percent against Euro, according to the Bank of Ghana.

“The depreciation of the currency was driven by higher crude oil product import bill on the back of rising prices, non-roll over of maturing bonds by non-resident investors, portfolio reversals and sudden exit of non-resident investors in the bond market, as well as loss of market access to Eurobond resources. The effect of these factors has been exacerbated by the strength of the US dollar, resulting in depreciation of the local currency from the beginning of the year-to-date.”
Bank of Ghana

Mixed developments on the international markets

Ghana’s main export commodities saw mixed developments on the international markets in the first nine months of the year. Bank of Ghana noted that the strong rally in Brent crude oil prices since the start of 2022 slowed somewhat to settle at US$97.74 per barrel, representing a 30.7 percent year to date gain on the back of global recession concerns.

On cocoa, prices have eased to US$2,385.96 per tonne, representing a contraction of 3.9 percent on year-to-date basis. Gold price also fell by 1.5 percent to settle at US$1,763.71 per fine ounce due to higher bond yields and a strong US dollar, as the US Fed reaffirmed its commitment to bring inflation under control.

At the end of August 2022, available data showed that the trade surplus was US$1.7 billion, far exceeding the surplus of US$892.4 million recorded in August 2021. This was driven by higher receipts from gold, crude oil and non-traditional exports, notwithstanding increased demand for oil and gas imports, BoG explained.

Total exports went up by 19.5 percent year-on-year to US$11.8 billion. Crude oil exports totaled U$3.8 billion, 56.5 percent higher than observed in 2021, mainly due to price effects. Gold export earnings also went up by 23.9 percent to US$4.2 billion, supported by increased production volumes triggered by the positive response from small scale gold exporters to the downward revision of the withholding tax regime from 3 percent to 1.5 percent.

However, on account of lower prices and low cocoa purchases, cocoa receipts declined by 22.8 percent to US$1.7 billion from US$2.1 billion.

Total merchandise imports grew by 12.9 percent on a year-on-year basis to US$10.2 billion, mainly driven by higher oil and gas import bill of US$3.1 billion at End-August 2022, relative to US$1.7 billion in the same period of 2021. Non-oil imports, however, dipped by 3.8 percent year-on-year to US$7.1 billion in the review period.