Ghana’s trade deficit widens to $2b on high imports

Ghana’s trade deficit rose to $2 billion year-on-year between January to July 2012 compared to last year due to continuous high merchandise imports.

The country’s trade merchandise exports between the seven-month period grew by 12.9% on a year-on-year basis to $8.4 billion while imports were $10.4 billion, registering a year-on-year growth of 18.3% over the same period last year 2011, according to the Bank of Ghana (BoG) Monetary Policy Committee report released September 12, 2012.

As a result of these developments, the BoG said the “deficit on the trade account widened to $2 billion in January to July 2012 compared with a deficit of $1.3 billion in the same period of 2011.”

As expected, the report indicated that the seven-month 2012 exports were mainly driven by gold, cocoa beans and crude oil. “Exports of gold were $3.5 billion, cocoa beans $1.8 billion and crude oil $1.6 billion,” the BoG said.

Other export receipts, including non-traditional exports, amounted to $1.5 billion, the central bank said.

Merchandise imports on the other hand saw oil imports, including crude, gas and refined products, amounting to $2 billion compared to $1.9 billion recorded in the corresponding period in 2011. Crude oil imports amounted to $577 million while imports of refined oil products were $1.3 billion with gas imports through the West African Gas Pipeline estimated at $107 million.

Total non-oil imports amounted to $8.4 billion and of this, capital imports were estimated at $1.9 billion while intermediate imports and consumption imports got to $4.1 billion and $1.84 billion respectively.

According to the BoG, the capital and financial account recorded lower net inflows of $787.1 million between January and June 2012, compared to $1.3 billion net inflows in the corresponding period of 2011.

The central bank explained that this was due to increased short-term capital outflows and lower portfolio investments.

However, net inflows of private capital improved on the back of increased Foreign Direct Investments (FDI) linked to the oil sector, the bank said.

By Ekow Quandzie