Ghana’s reserves surge to $8.98bn

Ghana’s gross international reserves saw a significant increase of $1.101 billion in December 2024, reaching a total of $8.982 billion. This translates to an import cover of 4.0 months, a notable improvement reflecting the country’s stronger external sector position.

Reserves Trend in 2024

Data from the Bank of Ghana reveals that the reserves began the year at $6.31 billion in January 2024 but experienced fluctuations, dropping to $5.99 billion in March before rebounding to $6.59 billion in February. By December 2024, the reserves had surged, marking a strong close to the year.

The November 2024 Monetary Policy Committee (MPC) report attributed this growth to an improved external sector. Higher current account surpluses and reduced net financial outflows contributed significantly to the build-up in reserves.

Trade Surplus Reaches $4.98 Billion

A key driver of Ghana’s improved external position was a substantial trade surplus of $4.98 billion recorded in December 2024, a sharp increase from the $2.694 billion surplus in December 2023.

This growth was bolstered by a 21.06% increase in total exports, which rose to $20.22 billion. The standout performer was gold exports, which surged by 53.15% to $11.64 billion, underscoring the commodity’s central role in the country’s trade profile.

However, exports of crude oil and cocoa faced declines. Crude oil exports fell slightly by 0.7% to $3.68 billion, while cocoa exports dropped significantly to $1.696 billion, down from $2.152 billion in December 2023. The decline in cocoa exports was attributed to adverse weather conditions and the impact of illegal mining (galamsey) on production.

Rising Import Bill

Despite the robust export performance, Ghana’s total import bill also increased, rising to $15.241 billion in December 2024 from $14.008 billion in December 2023. This growth in imports reflects heightened demand for goods and services amid an improving economic environment.

Context and Outlook

Ghana’s trade and reserve performance in 2024 highlights the country’s ability to leverage its natural resources, particularly gold, to strengthen its external sector. However, the declines in oil and cocoa exports underline the challenges posed by global market dynamics, climate change, and illegal mining activities.

With reserves at their highest levels in years and a healthy trade surplus, Ghana appears better positioned to navigate external shocks. However, sustaining the momentum will require strategic interventions, particularly in diversifying exports and addressing production challenges in the cocoa and oil sectors.