US$2.2bn Current account surplus bolsters cedi’s stability, BOP position
GHANA recorded a significant increase in its current account surplus, reaching US$2.2 billion in the first nine months of 2024, compared to US$912 million during the same period in 2023, according to the Bank of Ghana (BoG).
The BoG attributes the robust performance to higher export revenues from gold and crude oil, alongside strong remittance inflows. The factors have reinforced the country’s external sector performance, leading to a stronger Balance of Payment (BOP) position.
Improved BoP
The improved surplus was complemented by a reduction in net outflows in the capital and financial account, which amounted to US$414 million, a notable decline from US$1.4 billion recorded in 2023.
Together, these developments contributed to a substantial reserve build-up of US$1.91 billion by the end of September 2024, bringing Ghana’s total reserves to US$7.83 billion—equivalent to 3.5 months of import cover.
Further growth in reserves was observed, reaching US$7.92 billion as of November 22, 2024.
Strengthening the Ghana Cedi
The strong performance of the external sector has boosted confidence in the foreign exchange market, reflected in the recent gains of the Ghana cedi. Between the end of October and November 2024, the cedi appreciated by 6.0 percent against the US dollar, 7.6 percent against the British pound, and 9.1 percent against the euro.
These gains have moderated the year-to-date depreciation of the cedi, which now stands at 22.7 percent against the US dollar, 22.4 percent against the pound, and 19.1 percent against the euro.
Outlook
The surge in Ghana’s current account surplus and the associated reserve build-up highlight the resilience of the country’s external sector amidst global economic challenges. With reserves at a multi-year high and the cedi demonstrating relative stability, the outlook for Ghana’s foreign exchange market appears increasingly optimistic.
As the nation capitalizes on its strong export performance and remittance inflows, maintaining this momentum will be key to further stabilizing the cedi and reinforcing confidence in the broader economy.
