After a historic bull run that saw gold shatter records earlier this year, the tide has begun to turn.
Market analysts are now warning of a “global gold glut” as speculative demand cools and central bank buying patterns shift.
For Ghana, the continent’s leading gold producer, this price dip is more than a market fluctuation; it is a direct challenge to the nation’s 2026 fiscal stability and its record-breaking export earnings.
The gold boom meets a 2026 correction
In 2025, Ghana’s gold sector delivered a masterclass in revenue generation, contributing a staggering US$20.9 billion in export earnings, nearly doubling the previous year’s performance. However, as of late March 2026, the global “safe haven” rally has hit a resistance level.
According to market analysts, factors contributing to the “glut” include:
High Interest Rates: A “higher-for-longer” stance by the U.S. Federal Reserve has increased the opportunity cost of holding non-yielding gold.
Geopolitical Cooling: Signs of de-escalation in key global conflict zones have reduced the “fear premium” that previously drove prices above US$4,500/oz.
Increased Scrap Supply: Record-high prices in early 2026 triggered a massive wave of secondary gold (recycled jewelry and industrial gold) hitting the market.
The economic stake for Ghana
Fitch Solutions and local analysts at IC Group have sounded a cautionary note. While gold remains a vital buffer, a sustained dip below the US$4,500/oz mark could jeopardize the trade surplus Ghana has enjoyed since early 2025.
“Our 2026 budget is heavily anchored on gold’s resilience,” noted a senior economist at the Ministry of Finance. “While we have diversified through the ‘Gold-for-Oil’ program and local refining, the absolute spot price still dictates our foreign exchange liquidity and our ability to defend the Cedi.”
Ghana’s Gold Economy at a Glance (2025-2026)
Key Metric 2024 Actual 2025 Actual 2026 Projection (as of March)
To combat the volatility of raw commodity prices, Ghana officially began local refining on February 1, 2026. Under a landmark deal with the Gold Coast Refinery, at least one metric tonne of gold is now refined locally every week.
This move toward value addition is designed to:
1. Retain Refining Fees: Keeping wealth within the borders rather than paying external refineries.
2. Bolster Reserves: Allowing the Bank of Ghana to build “Good Delivery” bars for its own reserves.
3. Job Creation: Expanding the industrial footprint of the mining sector beyond extraction.
The outlook
Despite the “glut” and the slight price retreat, most analysts believe Ghana remains in a strong position compared to its peers. The trade surplus reached US$3.2 billion in the first two months of 2026 alone. However, the lesson of the current dip is clear: in the volatile world of 2026 commodities, reliance on a single “shiny” asset is a gamble.
As the government moves to implement a new sliding-scale royalty regime (reaching up to 12% when prices are high), the focus remains on capturing as much value as possible before the global market finds its new floor.
Data released by the Bank of Ghana last week reveals that the country’s merchandise trade surplus for the first two months of 2026 was US$3,689.7 million (equivalent to 3.0% of Gross Domestic Product) which was up by 72.54% on the US$2,136.7 million (1.9% of GDP) made during the corresponding two months of 2025.
But while the primary cause of this surge in the trade surplus was a 32.5% increase in total export earnings, fuelled by a nearly doubling of foreign exchange income from gold sales during the first two months of this year, an equally important, yet largely unacknowledged factor was an unusual marginal drop in the import bill. In January and February 2026, Ghana’s total import bill was US$2,516.3 million, down 1.2% from the US$2,548.3 million incurred during the corresponding period of 2025.
This was very unusual. Ghana’s import bill tends to rise by the year – with the notable exception of 2023 when the steep depreciation of the cedi amid huge foreign exchange shortages forced a fall in imports – and in 2026, the cedi’s major appreciation and a significant fall in commercial bank lending rates generated fears of a surge in imports by traders armed with cheaper credit to buy cheaper foreign exchange.
However the reverse happened and even though, during the first two months of this year, oil imports increased slightly to US$852.7 million, up from US$823.7 million in 2025, non-oil imports contracted significantly to US$1,663.6 million, down 3.5% from US$1,724.6 million during the corresponding two months of last year. More surprisingly, this was achieved at a time that economic growth remains strong. GDP growth for 2025 was an impressive 6% and although growth figures for the start of 2026 have not been made available, early data on economic activity levels emanating from the central bank suggests that this was carried over into 2026.
Analysts are suggesting that the stemming of the merchandise import bill at a time of strong economic growth indicates significant successes in import substitution with regards to finished goods, intermediate production inputs or both. This gives hope that Ghana may finally be reducing its inordinate import dependency, a requisite for direly needed increased job creation.
Although the slight reduction in the import bill took many economists by surprise, the sharp increase in export revenues was easily the bigger factor driving the substantial expansion of the merchandise trade surplus.
Yet despite the overall increase in export earnings, its structure gives cause for concern; while gold export revenue increased significantly during the first two months of this year, as compared with the corresponding period of 2025, all the other export categories cocoa, oil and non-traditional exports all saw their revenues decline, indicating an increasing, and already inordinate, reliance on gold revenues.
Gold revenues for the first two months of 2026, at US$4,257.4 million were 84.1% higher than 2025’s US$2,312.8 million. However cocoa’s export revenues declined from US$1194.7 million to US$956.3 million; oil’s revenues fell from US$581.3 million to US$451.5 million; and non-traditional exports shrank from US$596.2 million to US$451.5 million.
This means that for the first two months of 2026, gold exports accounted for 68.6% of Ghana’s total export revenues, up from 49.4% during the corresponding year of 2025, creating the spectre of the country moving towards becoming a mono-product exporter.
Ghana closed 2025 on a strong external note, recording a US$31.1 billion in export earnings, up sharply from US$19.1 billion in 2024.
According to the Bank of Ghana’s Summary of Economic and Financial Data released on January 27, 2026, the surge was driven overwhelmingly by gold exports, which emerged as the backbone of Ghana’s external performance. Gold earnings climbed to US$20.0 billion in 2025, nearly doubling the US$10.3 billion recorded a year earlier, and accounting for the bulk of the expansion in merchandise exports.
Cocoa exports also posted a strong rebound, generating US$3.8 billion in receipts double the US$1.9 billion recorded in 2024. This performance has drawn attention within the industry, especially given the decline in global cocoa prices over the period.
In contrast, oil export earnings fell to US$2.6 billion in 2025 from US$3.8 billion the previous year, reflecting weaker global crude prices. Other exports contributed a combined US$3.6 billion to total export earnings.
Import Bill and Trade Balance
On the import side, Ghana’s total import bill reached US$17.4 billion in 2025. Oil imports increased to US$5.1 billion from US$4.6 billion in 2024, while non-oil imports rose to US$12.3 billion, up from US$10.7 billion.
The strong export performance, against relatively moderate import growth, translated into a substantial improvement in the trade balance, which recorded a surplus of US$13.6 billion.
Reserves and External Buffers Strengthen
Ghana’s improved trade position significantly strengthened its external buffers. Gross international reserves rose to a record US$13.8 billion in 2025, providing enhanced cover against external shocks.
The current account balance also improved markedly, ending December 2025 at over US$9.0 billion, compared with US$1.5 billion (1.8 percent of GDP) a year earlier.
The Bank of Ghana attributed the turnaround largely to the trade account surplus of US$13.7 billion, a sharp rise from US$3.8 billion in 2024, underpinned by a 62 percent increase in exports, driven primarily by a 103 percent jump in gold export revenues.
The data further show that Ghana’s economy, in nominal terms, was valued at approximately US$1.4 trillion, underscoring the scale of the country’s expanding economic footprint.
Some market watchers are worried over the government’s heavy reliance on gold exports to build the country’s reserves, identifying it as a key underlying risk to the implementation of the 2026 Budget.
They point to volatility in international gold prices as a major vulnerability.
These concerns echo warnings from Fitch Solutions, which says risks to Ghana’s economic growth outlook remain tilted to the downside.
The UK-based firm identifies gold prices as the principal vulnerability, noting that its Commodities Team expects prices to average a record US$3,700 per ounce in 2026.
Analysts caution that while elevated gold prices may provide short-term fiscal relief, a sudden correction in global markets could weaken external buffers and place renewed pressure on the cedi.
This, they argue, underscores the need for a more diversified reserve-building strategy that is less exposed to commodity price shocks.
In an interview with Citi Business News, finance and tax analyst Nelson Cudjoe Kuagbedzi urged the government to reduce its overdependence on commodity exports, even as some commodities continue to perform strongly.
“Cocoa has done very well, we have also exported crude oil, remittances have contributed significantly, and inflows from the International Monetary Fund (IMF) have supported the reserves we have built. However, we cannot rely solely on commodity exports because of their inherent price volatility. We do not control international commodity prices, but where prices are favorable, we should take advantage of the windfall and continue to build reserves to support the stability of the cedi,” he said.
He further noted that broadening the export base would help cushion the economy against external shocks and enhance long-term macroeconomic stability.
Cedi maintains steady footing against the dollar in 2025, buoyed by policy discipline and gold exports.
By Toma Imirhe & Elorm Desewu
Considering that 2025 is another year during which Ghana will not have access to the international capital market it is only to be expected that both participants in the local economy and international direct investors would be nervous about the direction and quantum of the change in the exchange rate between the Ghanaian cedi and the United States dollar over the coming months.
Indeed it would appear they have good reason to worry. The relative exchange stability enjoyed by the cedi during the latter years of the previous decade and the start of this one were primarily achieved by heavy borrowing of US dollars in the form of annual Eurobond issues of US$3 billion, most of which was used to prop up the supply of foreign exchange on the local currency market. However when the three international sovereign credit ratings agencies – Fitch, Moodys and Standard & Poors – all decided that Ghana’s public forex debt was unsustainable towards the end of 2022 and Bloomberg began justifying the resultant price discounts and consequent sharp rise in yields on Ghana-issued Eurobonds to investors still holding on to them, the real cost of this cavalier strategy became clear.
Since then, the value of the cedi against the US dollar has fallen to barely a third of what it used to be, with a dollar trading for GHc15.56 by mid April 2025 on the interbank forex market – and a significantly higher GHc16.10 on the retail market – compared with a little over GHc6 to a dollar as at the third quarter of 2022. Instructively the cedi’s free fall continued through to 2024, with the currency depreciating by 28% against the American greenback last year alone.
But Ghana’s pivotal change of government from the erstwhile profligate Nana Akufo-Addo administration to the much more fiscally restrained incumbent President John Dramani Mahama administration, coupled with favourable developments in the country’s key international commodity export markets have changed the exchange rate trajectory sharply. While the cedi still depreciated sharply during the first quarter of 2025 when the Mahama administration was settling in – by 5.36% against the dollar – this was followed by marginal appreciation at the start of April which narrowed the year to date fall to less than 3%, and relative exchange rate stability since then.
Speaking after the 123rd Monetary Policy Meeting in late March, Governor of the Bank of Ghana, Dr. Johnson Asiama, announced a set of measures aimed at stabilizing the Ghanaian cedi, as the currency faces continued pressure against major foreign currencies.
These include tightening monetary policy to control inflation, enhancing foreign exchange reserves and structural reforms to address exchange rate misalignment.
Dr. Asiama stresses the need for monetary and fiscal coordination, inflation control, and structural reforms to restore confidence in the cedi.
“On top of the projected steady growth for 2025, the international markets have priced in a much stronger US economy stemming from the policies to be implemented by the new US administration. This has already instigated a stronger US dollar with implications for emerging markets and developing economies, including Ghana” he warns.
“Complementary fiscal and monetary policies will therefore have to be carefully set to prevent spillovers to the Ghanaian economy.
“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 (in 2024) 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.”
Importantly he is backing his words with concrete action. The Bank of Ghana supported the foreign exchange market with US$264.4 million in March 2025 alone to preserve the stability of the cedi.
Indeed, such interventions reflect the growing size of Ghana’s gross international reserves and the consequent ability to both provide forex liquidity in the local market and directly intervene in it when deemed necessary.
Easily the biggest contributor to this newfound strength is gold, which is continuously setting new international market price records by the week. The price of a fine ounce of gold is currently around US$3,227 and is rising so fast that even Goldman Sach’s earlier forecast of a closing price for the year of over US$3,500 now looks much too conservative.
Apart from enjoying the direct benefits of the ongoing unprecedented price surge, it is also encouraging investment in increased production in Ghana and, more recently, concerted efforts by the new government to formalize small scale mining (most of which has been illegal and environmentally unfriendly) and take control of the sale of the gold it produces, much of which has been smuggled out in the past.
Databank Research expects the new government to prioritize domestic mining, boosting gold production to bolster reserves. According to its Ghana Outlook report for 2025 “In the aftermath of the elections, the new government may focus on enhancing domestic mining companies to boost gold production. This comes at a time when gold reserves have been steadily increasing in recent years, standing at 37.52 metric tonnes as of the second quarter of 2024, with projections indicating a rise above the levels recorded in 2023. We believe the move will further augment gold reserves and offer a potential cushion for the Cedi.”
Oil prices are falling too but this is a double edged sword, favouring consumers who might be able to enjoy price cuts at the pump on imported petroleum products, and lower diesel import costs for powering thermal electricity stations, but putting government’s forex revenue target from crude oil exports in jeopardy.
Cocoa prices are still hovering not too far behind the over US$10,000 per ton they peaked at last year and Ghana’s production looks set to exceed its 617,000 target for the current crop season, but about a third of this is going into fulfilling supply contracts that the country defaulted on during the previous disastrous crop season.
Commodity prices on international markets – and to a lesser extent, production – are outside the complete purview of government itself, but the Mahama administration is proving prudent in the fiscal management and economic policy measures that it can control and these are already yielding palpable results which are not going unnoticed both at home and abroad.
Databank Research predicts that political stability after the 2024 elections is expected to attract foreign direct investment (FDI) and portfolio inflows, easing speculative pressures on the cedi. Disciplined fiscal policies are projected to reinforce this recovery.
“We expect a successful 2024 election to bring renewed confidence in the Ghanaian economy which should lead to increased foreign direct investment and portfolio inflows. This development would bolster investment sentiments around the cedi and reduce speculative attacks on the currency,” Databank Research notes.
Indeed, following Ghana’s Eurobond debt restructuring in 2024, Moody’s and Fitch upgraded the country’s ratings, with Moody’s moving its issuer rating from “Caa3” to “Caa2” and assigning a positive outlook.
Databank also predicts further upgrades as economic indicators improve, strengthening the cedi.
“Following the successful Eurobond debt rework in the 3rd quarter of 2024, global rating agencies Moody’s and Fitch upgraded Ghana’s long-term local and foreign currency issuer ratings. Moody’s upgraded the issuer rating from “Caa3” to “Caa2” and “Ca”, respectively, and assigned a positive outlook,” Databank notes.
“Fitch Solutions followed with the upgrades, assigning a “CCC+” to Ghana’s new USD bonds from the initial “CCC”. We expect a further upgrade as the rating agencies cited that continuous improvement in economic indicators would attract higher upgrades. We expect these developments to improve sentiments around the Cedi and allow for its stability,” the research firm predicts.
Inevitably quantitative forecasts for the cedi’s exchange rate performance against the US dollar vary from one forecasting firm to another, depending on the specific nature of their econometric modelling and trend analyses. But instructively none of the forecasts predict major depreciation during 2025.
Coin Codex, an American economic and financial forecaster expects that in 2025, the exchange rate between the US dollar and the Ghanaian Cedi is anticipated to range between GHc 15.06 and GHc 16.91, leading to an average annualized price of GHc 15.90.
World renown accounting and management consulting firm Deloitte predicts that in 2025, the improved investor confidence arising from the relatively peaceful election, the conclusion of the government’s debt restructuring negotiations, periodic International Monetary Fund (IMF) disbursements and higher gold export receipts will boost the international reserves level of the country and support the cedi’s value.
Gov Capital Forecasts expects the US dollar to exchange at GHc15.70 by the end of the third quarter of this year.
What all these forecasts have in common though is that the exchange rate will remain more or less stable through 2025 which means currency traders planning to take positions against the cedi – a major cause of cedi depreciation in the past – would be better off investing in government or Bank of Ghana bills which offer better returns on their investment.
Ghana’s cedi shows signs of stability in 2025, driven by improved fiscal discipline, surging gold prices, and increased investor confidence.
By Toma Imirhe & Elorm Desewu
Considering that 2025 is another year during which Ghana will not have access to the international capital market it is only to be expected that both participants in the local economy and international direct investors would be nervous about the direction and quantum of the change in the exchange rate between the Ghanaian cedi and the United States dollar over the coming months.
Indeed it would appear they have good reason to worry.
The relative exchange stability enjoyed by the cedi during the latter years of the previous decade and the start of this one were primarily achieved by heavy borrowing of US dollars in the form of annual Eurobond issues of US$3 billion, most of which was used to prop up the supply of foreign exchange on the local currency market. However when the three international sovereign credit ratings agencies – Fitch, Moodys and Standard & Poors – all decided that Ghana’s public forex debt was unsustainable towards the end of 2022 and Bloomberg began justifying the resultant price discounts and consequent sharp rise in yields on Ghana-issued Eurobonds to investors still holding on to them, the real cost of this cavalier strategy became clear.
Since then, the value of the cedi against the US dollar has fallen to barely a third of what it used to be, with a dollar trading for GHc5.56 by early April 2025 on the interbank forex market – and a significantly higher GHc6.10 on the retail market – compared with a little over GHc6 to a dollar as at the third quarter of 2022. Instructively the cedi’s free fall continued through to 2024, with the currency depreciating by 28% against the American greenback last year alone.
But Ghana’s pivotal change of government from the erstwhile profligate Nana Akufo-Addo administration to the much more fiscally responsible incumbent President John Dramani Mahama administration, coupled with favourable developments in the country’s key international commodity export markets have changed the exchange rate trajectory sharply. While the cedi still depreciated sharply during the first quarter of 2025 while the Mahama administration was settling in – by 5.36% against the dollar – this was followed by marginal appreciation at the start of April which narrowed the year to date fall to less than 3%, and relative exchange rate stability since then.
Speaking after the 123rd Monetary Policy Meeting in late March, Governor of the Bank of Ghana, Dr. Johnson Asiama, announced a set of measures aimed at stabilizing the Ghanaian cedi, as the currency faces continued pressure against major foreign currencies.
These include tightening monetary policy to control inflation, enhancing foreign exchange reserves and structural reforms to address exchange rate misalignment.
Dr. Asiama stresses the need for monetary and fiscal coordination, inflation control, and structural reforms to restore confidence in the cedi.
“On top of the projected steady growth for 2025, the international markets have priced in a much stronger US economy stemming from the policies to be implemented by the new US administration. This has already instigated a stronger US dollar with implications for emerging markets and developing economies, including Ghana” he warns.
“Complementary fiscal and monetary policies will therefore have to be carefully set to prevent spillovers to the Ghanaian economy.
“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 (in 2024) 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.”
Importantly he is backing his words with concrete action. The Bank of Ghana supported the foreign exchange market with US$264.4 million in March 2025 alone to preserve the stability of the cedi.
Indeed, such interventions reflect the growing size of Ghana’s gross international reserves and the consequent ability to both provide forex liquidity in the local market and directly intervene in it when deemed necessary.
Easily the biggest contributor to this newfound strength is gold, which is continuously setting new international market price records by the week. The price of a fine ounce of gold is currently around US$3,227 and is rising so fast that even Goldman Sach’s earlier forecast of a closing price for the year of over US$3,500 now looks much too conservative.
Apart from enjoying the direct benefits of the ongoing unprecedented price surge, it is also encouraging investment in increased production in Ghana and, more recently, concerted efforts by the new government to formalize small scale mining (most of which has been illegal and environmentally unfriendly) and take control of the sale of the gold it produces, much of which has been smuggled out in the past.
Databank Research expects the new government to prioritize domestic mining, boosting gold production to bolster reserves. According to its Ghana Outlook report for 2025 “In the aftermath of the elections, the new government may focus on enhancing domestic mining companies to boost gold production.
This comes at a time when gold reserves have been steadily increasing in recent years, standing at 37.52 metric tonnes as of the second quarter of 2024, with projections indicating a rise above the levels recorded in 2023. We believe the move will further augment gold reserves and offer a potential cushion for the Cedi.”
Oil prices are falling too but this is a double edged sword, favouring consumers who might be able to enjoy price cuts at the pump on imported petroleum products, and lower diesel import costs for powering thermal electricity stations, but putting government’s forex revenue target from crude oil exports in jeopardy.
Cocoa prices are still hovering not too far behind the over US$10,000 per ton they peaked at last year and Ghana’s production looks set to exceed its 617,000 target for the current crop season, but about a third of this is going into fulfilling supply contracts that the country defaulted on during the previous disastrous crop season.
Commodity prices on international markets – and to a lesser extent, production – are outside the complete purview of government itself, but the Mahama administration is proving prudent in the fiscal management and economic policy measures that it can control and these are already yielding palpable results which are not going unnoticed both at home and abroad.
Databank Research predicts that political stability after the 2024 elections is expected to attract foreign direct investment (FDI) and portfolio inflows, easing speculative pressures on the cedi. Disciplined fiscal policies are projected to reinforce this recovery.
“We expect a successful 2024 election to bring renewed confidence in the Ghanaian economy which should lead to increased foreign direct investment and portfolio inflows. This development would bolster investment sentiments around the cedi and reduce speculative attacks on the currency,” Databank Research notes.
Indeed, following Ghana’s Eurobond debt restructuring in 2024, Moody’s and Fitch upgraded the country’s ratings, with Moody’s moving its issuer rating from “Caa3” to “Caa2” and assigning a positive outlook.
Databank also predicts further upgrades as economic indicators improve, strengthening the cedi.
“Following the successful Eurobond debt rework in the 3rd quarter of 2024, global rating agencies Moody’s and Fitch upgraded Ghana’s long-term local and foreign currency issuer ratings. Moody’s upgraded the issuer rating from “Caa3” to “Caa2” and “Ca”, respectively, and assigned a positive outlook,” Databank notes.
“Fitch Solutions followed with the upgrades, assigning a “CCC+” to Ghana’s new USD bonds from the initial “CCC”. We expect a further upgrade as the rating agencies cited that continuous improvement in economic indicators would attract higher upgrades. We expect these developments to improve sentiments around the Cedi and allow for its stability,” the research firm predicts.
Inevitably quantitative forecasts for the cedi’s exchange rate performance against the US dollar vary from one forecasting firm to another, depending on the specific nature of their econometric modelling and trend analyses. But instructively none of the forecasts predict major depreciation during 2025.
Coin Codex, an American economic and financial forecaster expects that in 2025, the exchange rate between the US dollar and the Ghanaian Cedi is anticipated to range between GHc 15.06 and GHc 16.91, leading to an average annualized price of GHc 15.90.
World renown accounting and management consulting firm Deloitte predicts that in 2025, the improved investor confidence arising from the relatively peaceful election, the conclusion of the government’s debt restructuring negotiations, periodic International Monetary Fund (IMF) disbursements and higher gold export receipts will boost the international reserves level of the country and support the cedi’s value.
Gov Capital Forecasts expects the US dollar to exchange at 15.70 by the end of the third quarter of this year.
What all these forecasts have in common though is that the exchange rate will remain more or less stable through 2025 which means currency traders planning to take positions against the cedi – a major cause of cedi depreciation in the past – would be better off investing in government or Bank of Ghana bills which offer better returns on their investment.
Ghana’s current account surplus hits US$3.8bn in 2024 driven by strong gold exports
Adnan Adams Mohammed
Ghana’s current account recorded a provisional surplus of US$3.8 billion in 2024, compared with a surplus of US$1.4 billion in 2023, Bank of Ghana economic data has indicated.
This performance was driven mainly by higher gold and crude oil exports, as well as strong remittance inflows.
The central bank explained that, this, together with a lower net outflow of US$588 million in the capital and financial account, relative to a net outflow of US$733 million in 2023, contributed to an improved balance of payments position for the year.
“The lower outflow in the capital and financial account reflects Ghana’s successful debt restructuring and the IMF ECF programme”, Governor Dr Ernest Addison told journalists last week at the latest Monetary Policy Committee press briefing. “These favourable developments resulted in an improved balance of payments surplus of US$3.1 billion, compared to a surplus of US$518 million recorded in 2023.”
Also, the central bank noted that 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.
Ghana achieves a record high US$5 billion trade surplus in 2024
By Toma Imirhe
A combination of surging gold prices on one side and the reduced availability of foreign exchange due to the closure of Ghana’s access to international capital markets, coupled with the inordinate cost of international trading currencies, have supported an improvement in the country’s merchandize trade performance to a long term surplus position in 2024. Last year, Ghana recorded a merchandise trade surplus of US$4,980.0 million, which was 46% higher than the surplus of US$2,694.5 million earned in 2023. This helped to support both a primary account balance and an improved balance of payments position, illustrating the fact that the intense pressure on the cedi’s exchange rate is the result of portfolio investment and debt servicing outflows, lac k of confidence in the national currency by currency traders and to a lesser extent forex leakages through illegal transfers abroad of monies and natural resources, particularly gold and cocoa.
The import bill has resumed its upward trend, after recording rare declines in 2023, following the cedi’s sharp depreciation which had made imports less competitive against locally produced alternatives. In 2024, the overall import bill rose by 8.7% to US$15,231.2 billion, up from US$14,008.5 in the previous year. Importantly though, the increase in the oil import bill was negligible, rising to US$4,481.7 million last year, from US$4,475.3 million in the previous year. Indeed the rise in import value came almost entirely from non-oil imports of intermediate production inputs and finished goods which increased by 12.9% from US$9,533.2 million in 2023 to US$10,759.5 million in 2024, as the economy enjoyed faster than anticipated growth during the year.
But the main driver of the improved overall merchandise trade performance was the substantial 21.1% increase in Ghana’s exports last year to US$20,221.0 million, up from US$16,703 million in 2023. However this increase was entirely fuelled by a 53.2 % increase in gold exports from US$7,600.8 million in 2023 to US$11,641 million in 2024. Conversely, oil exports stagnated in value, its US$3,868.3 million hardly higher than the US$3,837.3 million earned in the previous year. Cocoa fared even worse, earning just US$1,696.1 million in 2024, down 21.2% from the US$2,153.0 million generated in 2023.
”The external sector position improved significantly in 2024 on account of increased trade surplus and lower capital outflows” Dr Ernest Addison, Governor of the Bank of Ghana has enthused. “The current account recorded a provisional surplus of US$3.8 billion, compared with a surplus of US$1.4 billion in 2023, driven mainly by higher gold and crude oil exports, as well as strong remittance inflows” he has further revealed. “This, together with a lower net outflow of US$588 million in the capital and financial account, relative to a net outflow of US$733 million in 2023, contributed to an improved balance of payments position for the year. The lower outflow in the capital and financial account reflects Ghana’s successful debt restructuring and the International Monetary Fund’s Extended Credit Facility programme. These favourable developments resulted in an improved balance of payments surplus of US$3.1 billion, compared to a surplus of US$518 million recorded in 2023.” This strong external sector performance in last year means that international reserves build-up was faster than programmed in 2024. Gross International Reserves (GIR) increased to a stock position of US$8.98 billion at the end of 2024 and was enough to cover 4.0 months of imports, exceeding targets under the IMF programme. This compares favourably with the end-December 2023 GIR of US$5.92 billion (2.7 months of imports).
“In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production” predicts Dr Addison, based on the central bank’s research and the Monetary Policy Committee’s assessment. “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.”
