“We forecast that Ghana's growing exports and relatively weak import growth will see the current account deficit continue to fall from 2.3 percent of GDP to 1.0 percent by 2019.”
The report said “oil exports will increase sharply over the coming years after the TEN oilfield came online in August 2016, which we forecast will contribute to production growth of 15.2 percent year-on-year in 2017 and 26.6 percent growth in 2018. In addition to increasing production, export revenues will receive a further boost from higher oil prices”.
It further stated that Ghana’s gold exports, which is 39.1 per cent of all goods exports in 2015 will also receive a boost in 2017, as prices are expected to increase from US$1,248.0 per ounce in 2016 to US$1,300.0 per ounce in 2017, and USD1,400 per ounce in 2018 on the back of increasing global uncertainty.
Finally, the recovery in cocoa prices, expected to begin in 2018, will offer another tailwind to the country's export revenues, having accounted for 25.4 percent of total goods exports in 2015, it added.
Also, inflows of Foreign Direct Investments will likely see some decline from 2016 levels but will nonetheless remain robust in order to sustain a number of ongoing infrastructure projects to 2019.
Although several projects are finishing in 2017, BMI said “ we believe a number of major works such as the TEMA LNG terminal-construction beginning 2017- and the TEMA port expansion to be completed in 2019 will begin over our short-term outlook. As such, despite a mild deceleration in inward flows of fixed investment, we believe levels of FDI will remain sufficient to finance the declining current account deficit.”
Ghana had seen a decline in its stock of foreign reserves since 2014, BMI said it believe these developments in the country's external position will allow for some recovery between 2017 and 2019, offering a potential buffer to future volatility.