Ghana’s External Position Remains Vulnerable Despite Rising Reserves – Fitch Solutions
Ghana’s external position remains highly susceptible to external shocks, particularly fluctuations in commodity prices, according to a recent analysis by Fitch Solutions. The country’s trade balance, which is heavily reliant on gold exports, faces risks from global economic uncertainties and geopolitical developments.
While gold prices are expected to remain elevated in 2025, potential headwinds—such as a stronger-than-expected US dollar or resolutions to ongoing military conflicts in the Middle East and Ukraine—could drive prices down sharply. Such a scenario would negatively impact Ghana’s export revenues, exacerbating vulnerabilities in its external sector.
Additionally, global trade dynamics remain a concern. Although broad tariffs imposed by US President Donald Trump would have minimal direct effects on Ghana’s exports, they could contribute to reduced investor confidence in Ghana and other emerging markets. This, in turn, could lead to capital outflows and put pressure on Ghana’s foreign exchange liquidity.
Despite these risks, Ghana’s international reserves are projected to rise in the coming months. The conclusion of the country’s debt restructuring process is expected to improve investor sentiment, attracting capital inflows. Combined with a continued current account surplus, Fitch Solutions forecasts that Ghana’s foreign exchange reserves will reach $8.8 billion, equivalent to 3.5 months of import cover.
The outlook suggests that while Ghana may experience short-term relief from improved reserves, structural weaknesses in its external sector persist, leaving it exposed to global economic shifts.
