Adnan Adams Mohammed
The Bank of Ghana has announced that Ghana’s Gross International Reserves (GIR) increased to a stock position of US$8.98 billion at the end of 2024, enough to cover 4.0 months of imports.
This exceeded targets under the IMF programme. The 2024 remarkable improvement compares favourably with the 2023 reserves of US$5.92 billion (2.7 months of imports).
The Bank of Ghana’s Gold for Oil Policy and Domestic Gold Purchasing Programme contributed significantly to this through the strategic accumulation of gold.
“This is part of the Central Bank’s broader efforts to shield the economy from external shocks, enhance the country’s foreign exchange reserves and strengthen Ghana’s position in global markets”, Governor Dr Ernest Addison told journalists last week at the latest MPC press briefing.
“It is also a decisive step toward stabilising Ghana’s financial outlook, especially as global uncertainties weigh heavily on economies worldwide.”
In terms of impact, the increase in gold reserves is expected to serve as a hedge against inflation, reduce the country’s vulnerability to currency fluctuations and bolster investor confidence.
Market watchers are therefore keenly focused on the implications for Ghana’s fiscal policy and its standing in the global economy, as the Bank of Ghana continues to diversify and strengthen its reserves.
Comparable on the continent, Libya has maintained a substantial foreign currency reserve totaling $80.7 billion in 2024, positioning it as the top country in Africa in this regard. This achievement coincides with Libya’s status as one of the continent’s major oil exporters.
Meanwhile, on the global front, China had, by far, the largest international reserves in 2024, with
US$3.59 trillion in reserves and foreign currency liquidity.
Ghana has risen to become the fifth-largest holder of central bank gold reserves in Africa, with 28.1 tonnes as of October 2024. This marks a significant increase from May 2023, when its reserves stood at just under 9 tonnes, reflecting consistent efforts to bolster its holdings.
Consequently, external sector conditions remain positive, with sustained and stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency. The performance of the external sector was mainly driven by strong growth in gold exports, which also largely impacted positively on growth.
In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production. Overall, while the external sector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook including challenges in the energy sector will have to be closely monitored.
