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Ghana records $247m surplus

March 9, 2017, 3:17 p.m.

It’s first time in 5yrs

By Augustine Amoah

FOR the first time since 2011, Ghana recorded a surplus in its balance of payment of US$247 million, about 0.6 percent of GDP, the Bank of Ghana (BoG)has stated in its Monetary Policy Report for 2016.

This is compared to a deficit of US$129 million, approximately-0.3 percent of GDP in 2015.

According to the Central Bank, this largely reflects an improvement in the trade balance driven by a rise in gold export receipts and a fall in oil import prices. “The improvement more than compensated for the moderation in the capital and financial accounts arising from lower official foreign inflows”, it added.

The balance of payments, also known as balance of international payments (BoP), of a country is the record of all economic transactions between the residents of the country and the rest of the world in a period.

In the detailed report, the regulator of the banking industry said the improved BOP position translated into external reserves accretion.

Gross foreign assets also increased to US$6.2 billion in 2016, equivalent to 3.5 months import cover. This is against US$5.9bn in 2015.

In this regard, it stated that the balance of payments outlook for 2017 remains positive given that production levels at the TEN oil fields and the Sankofa Fields are expected to ramp up, resulting in increased volume of oil exports. On the downside, it said the expected hikes in Fed’s rate and the possible appreciation of the US dollar leading to tight external financing conditions and lower portfolio inflows, which may exert downward pressures on the exchange rate and worsen the inflation outlook.

In 2016, the trade balance improved from a deficit of US$3.1 billion in 2015 to a deficit of US$1.7billion due to an increase in exports receipts by 7.2 percent and a decline in imports by 5.3 per cent. The services and income accounts also recorded appreciable improvement during the year, but the transfers account was impacted adversely by delays in grant disbursements and reduced remittance inflows. Consequently, the provisional estimates of the current account deficit improved to US$2.6bn in 2016 compared with US$2.8bn in 2015.

The capital and financial account surplus reduced by 5.8 percent due to a marginal increase in foreign direct investment coupled with lower portfolio inflows and official loan disbursements during the period.  

Ghana's earnings from the exports of gold, cocoa and crude oil for 2016 went up marginally, compared to 2015.

It reached US$11 billion according to latest data released by the Bank of Ghana (BoG) which is higher than the US$10.3 billion secured in 2015.