Ghana records positive BoP; earns $2.3 billion trading with the world
Ghana’s Balance of Payment (BoP) for the first half of 2021 recorded a surplus of $2.36 billion.
The recorded surplus according to the July 2021 Summary of Economic and Financial Data of the Bank of Ghana (BoG), represents 3.3 percent of current Gross Domestic Product (GDP).
The country’s BoP same period last year posted a surplus of $1 billion representing 1.5 percent of GDP.
A current account deficit of $926 (1.3 percent of GDP) and a capital and financial account surplus of $3.3 billion (4.6 percent of GDP), accounted for the 3.3 percent surplus recorded in the country’s BoP as at end-June 2021.
Trade balance – difference between exports and imports – which forms a major component of current account posted a surplus of $837 million (1.2% of GDP).
Recorded surplus in the country’s trade balance was on the account of increased exports of cocoa, gold and oil.
Read: Ghana loses $429 million in its transactions with the rest of the world
Revenue accrued to government from total exports amounted to $3.9 billion in March 2021, which expanded further to $7.5 billion in June 2021.
Value of total imports also grew from $3.3 billion in March to $6.7 billion in June this year.
A country’s current account is made up of its trade balance, remittances and dividends from foreign financial assets such as stocks.
Given that the country’s trade balance is positive, the recorded deficit in the current account might be due to a decline in the value of the other two components; remittances and dividends – remittances for June 2021 stood at $2.1 billion. At end-December 2020, recorded remittances into the country was $3.6 billion.
The other component of the BoP – Capital and Financial Account – posted a surplus of $3.3 billion.
The recorded surplus however represents a significant reduction from the $1.72 billion recorded for same period last year.
Despite the recorded surplus, Foreign Direct Investment (FDI) which forms a major component of Capital and Financial Account decreased from $1.3 billion in December 2020 to $954 million in June 2021.
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Recorded Gross International Reserves (GIR) for end-June 2021, amounted to $11.02 billion providing 5.0 months import cover for the country.
Meanwhile, Ghana’s Balance of Payment (BoP) at the end of March 2021 recorded a deficit of $429.9 million.
The recorded deficit according to the May 2021 Summary of Economic and Financial Data of the Bank of Ghana (BoG), represents 0.59 percent of current Gross Domestic Product (GDP).
A current account deficit of 0.5 percent of GDP accounted for the 0.59 percent deficit recorded in the country’s BoP as at end-March 2021.
