Ghana’s net reserves drop to 2.7 months of import cover

Ghana’s net reserves drop to 2.7 months of import cover

Ghana’s net international reserves have fallen to $2.44 billion as of December 2022, according to the Bank of Ghana’s January 2023 Summary of Economic and Financial Data.

This represents a decline from the $6.07 billion recorded in December 2021 and equates to roughly 2.7 months of import cover.

Furthermore, the country’s balance of payments ended the year with a deficit of $3.63 billion, compared to a surplus of $510.1 million in December 2021.

This was largely due to a significant decline in the capital and financial account balance, which recorded a deficit of $2.17 billion in December 2022, compared to a surplus of $3.30 billion in December 2021.

Analysts attribute the decline in net international reserves to the selling of investments by foreign investors, while Ghana’s trade surplus for 2022 stood at $2.75 billion, or 3.8% of Gross Domestic Product.

This was buoyed by strong proceeds from gold and oil exports, as well as a decrease in net imports.

However, despite the positive performance of gold and oil exports, cocoa receipts fell to $2.21 billion in December 2022, a decline from the $2.83 billion recorded in December 2021, due to lower prices and reduced purchases.