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Ghana’s trade position continues to improve

By Kofi Ahovi
Provisional trade data from the Monetary Policy Committee of the Bank of Ghana for the first five months of this year showed that the balance on the trade account narrowed significantly by US$729.4 million, from US$1,067.1 million to a deficit of US$337.7 million.

The MPC data indicates that total merchandise exports improved by US$2.1 billion to US$5.3 billion and represented a growth of 66.2% over the same period in 2010. Cocoa beans and products amounted to US$1.3 billion. Gold exports receipts amounted to US$1.8 billion. By the end of the 2009/2010 main cocoa season, cumulative purchases was 587,166 tons compared to the crop size at the close of the 2008/2009 season of 634,256 tonnes.
The robust growth in exports for the first five months of 2011, were mainly driven by oil, gold and cocoa beans. Exports of crude oil for the period amounted to 8.6 million barrels valued at US$954.6 million, while exports of gold and cocoa amounted to US$2 billion and US$1.4 billion respectively.

However, total merchandise imports amounted to US$5.6 billion during the first five months of the year, a little higher than the US$5.14 billion recorded of for the first half of 2010, representing an increase of 32.4% over the past year. Despite the increase in overall imports, crude oil imports declined by 8% to US$391.9 million, while imports of oil products increased by 18.7% to US$618.5 million. In terms of the end use of imports, consumer goods grew by 52.1% to US$2.3 billion, intermediate by 27.8% to US$1.1 billion and capital goods imports grew by 45.4% to US$ 900 million.

Private inward remittances channelled through the banks amounted to US$7.1 billion for January-May 2011 compared to US$4.2 billion for the same period in 2010. This represents a 68% increase over last year’s level. US$745.1 million of the total remittances received was from individuals.

At the end of May 2011, Gross International Reserves were US$4.7 billion, representing 3.7 months of import cover down from US$4.9 billion representing 3.8 months of import cover in April this year. The April figure was mainly as a result of portfolio inflows associated with the issue of a government 3-year treasury bond.

In the foreign exchange market, total purchases and sales of foreign by deposit money banks increased by US$2.6 billion. Total purchases and sales amounted to US$8.2 billion as at end May 2011 compared with US$5.7 billion for the same period in 2010. Developments in the local foreign exchange market show that the cedi cumulatively depreciated by 2.2%, against the US dollar in nominal terms during the first half of the year, compared with an appreciation of 0.1% for the same period in 2010.

In trade weighted terms, a nominal effective depreciation of 2.9% was recorded by the end of May 2011. In real trade-weighted terms, the cedi depreciated by 1.3%.

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