Ghana’s trade account recorded a surplus of $646.1 million, representing 1.4 percent of GDP, compared to a deficit of $2.0 billion (4.7 percent of GDP) over the same period last year.
According to the Bank of Ghana (BoG), the significant improvement in the trade account, based on latest estimates of trade data in the year to October 2017, was attributable to higher export receipts from gold, cocoa and oil occasioned by increased production, coupled with lower imports.
Dr Ernest Addison, Governor of the Bank of Ghana (BoG), who spoke to journalists Monday in Accra, said the external payments position showed resilience and improvements in the trade and the current accounts balances.
“The first three quarters of 2017 recorded a trade surplus which translated into a lower current account deficit of $1.1 billion (2.4 percent of GDP) compared with a deficit of $2.1 billion (4.9 percent of GDP) in the previous year.
“The capital and financial account also recorded positive net inflows, estimated at $1.7 billion (3.7 percent of GDP), which was sufficient to offset the current account deficit. As a result, the overall balance of payments for the first nine months recorded a surplus of $379.0 million (0.8 percent of GDP) and will increase further in the fourth quarter.”
Dr Addison revealed that foreign exchange market conditions have remained broadly stable supported by improved liquidity conditions, despite increased demand pressures observed over the past two weeks.
“In the year to 23rd November 2017, the Ghana cedi has cumulatively depreciated by 4.6 percent against the US dollar, unchanged from the pace of depreciation recorded in the corresponding period of 2016.”
He said Gross International Reserves (GIR) of Bank of Ghana increased to US$7.4 billion (4.1 months of import cover) as at 24th November, 2017 from a stock position of US$6.2 billion (3.5 months of import cover) in December 2016.
The Central Bank governor noted that the balance of payments position remained robust with a projected trade surplus and reduced current account deficit in 2017, adding that it was “on track to build up over US$700 million additional reserves this year alone to bring total gross international reserves to US$7.4 billion.”
Commenting on the banking industry performance, he said the initial fragilities in the banking sector have largely been contained and efforts were being made to strengthen the sector, including enhancing supervision and increasing the minimum capital requirements to ensure stronger and well-capitalized banks that can support the government’s transformational agenda.
By Samuel Boadi