Developments in Ghana’s external sector in the month of October were encouraging as the country recorded its highest trade balance equivalent to 1.5% of GDP since the beginning of 2021. The improvement in the trade balance was driven mainly by a strong growth in the country’s exports relative to its imports.
Data from the Bank of Ghana, show that in October, total exports amounted to US$12,210.4 million compared to imports of US$11,174.4 million which resulted in a trade balance of US$1,036.0 million. This accounted for 1.5 percent of the country’s total output.
Despite the improvement in the trade balance, it was still 1.0 percentage points lower than the 2.5 percent of GDP recorded in the corresponding month of October last year.
Total exports rose by US$1,176 million in October, up from US$11,034.4 million in September, driven mainly by a strong performance of the gold exports which rose to US$4,215.8 million in October from US$3,834.6 million in September. Cocoa exports also increased to US$2,411.4 million, up from US$2,298.5 million in September 2021. Likewise, Oil exports rose from US$2,790.2 million in September to US$3,192.0 million in October this year.
The performance of the country’s major export commodities in October this year was influenced hugely by the development of prices of these commodities on the international market. International commodity prices reflected mixed trends in the year to October 2021. According to the Bank of Ghana, crude oil prices rose sharply driven by the interplay of increased global demand as economies reopened and supply shortfalls. On a year-to-date basis, the average price of crude oil went up by 65.9 percent to US$83.3 per barrel in October 2021.
The average price of cocoa also increased marginally by 2.0 percent to trade at US$2,632.4 per tonne due to projected shortfalls for the 2021/22 season. Gold prices however, declined by 4.4 percent to average US$1,775.7 per fine ounce in October 2021, due to pressures from the strong US dollar.
Quarterly analyses show that Total merchandise exports was estimated at US$11.0 billion in Q3 2021 compared with US$10.8 billion in Q3 2020. Export receipts of cocoa beans and products and crude oil went up by 31.1 percent and 26.5 percent, respectively, while gold exports declined by 23.4 percent on account of lower production in Q3 2021.
Developments in the country’s imports indicate that the non-oil category continues to account for a chunk of commodities imported from other countries. Since the beginning of the year, this category of imports has been on the rise as economies open up and supply chains restored.
Even though the country’s imports of non-oil commodities continue to rise, it’s still below pre-COVID-19 levels of US$10,538.0 million recorded in December 2020. In the tenth month of the year, non-oil imports amounted to US$9,063.5 million, higher than the US$8,198.0 million recorded in the month of September 2021. Oil imports also rose to US$2,110.9 million in October, from US$1,898.3 million in September 2021.
Total merchandise imports were US$1.1 billion higher in October this year compared to a total value of US$10.1 billion recorded in September 2021. Of the total amount of imports in September, non-oil imports accounted for US$8.2 billion compared with US$7.9 billion recorded in the corresponding month of 2020.
A strong performance in the last quarter will further cushion the local currency against its major trading partners as the year gradually winds up.