Ghana’s Gross International Reserves Reach $7.92 Billion as of November 22, 2024

Ghana’s gross international reserves have experienced a substantial rise, reaching $7.92 billion as of November 22, 2024, marking an increase of $1.91 billion since September 2024. This uptick in reserves equates to 3.5 months of import cover, a significant indicator of the country’s improved financial stability.

At the beginning of 2024, Ghana’s reserves stood at $6.31 billion, but by March, they had slightly decreased to $5.99 billion. However, the reserves showed a positive trajectory throughout the year, rising to $6.59 billion by February 2024 and continuing on this upward trend thereafter.

The Bank of Ghana (BoG) attributed this positive development in the country’s external sector to various factors. In its recent Monetary Policy Committee (MPC) report, the central bank noted the notable improvement in Ghana’s external balance, largely driven by a higher current account surplus and a reduction in net financial outflows. These factors have played a pivotal role in strengthening the nation’s external reserves.

A key contributor to the reserves’ growth has been Ghana’s impressive current account surplus, which surged to $2.2 billion in the first nine months of 2024. This marked a sharp increase from the $912 million surplus recorded during the same period in 2023. The improvement in the current account was largely driven by increased exports of gold and crude oil, as well as a notable rise in remittance inflows. Gold and crude oil are two of Ghana’s major export commodities, and the global demand for these products has bolstered the country’s foreign exchange earnings. Additionally, remittances from Ghanaians living abroad have been a crucial support to the economy, further boosting the reserves.

Another important factor in the growth of Ghana’s gross reserves has been a reduction in the net financial outflows in the capital and financial account. In the first three quarters of 2024, Ghana saw a net outflow of $414 million in this account, a significant improvement compared to a net outflow of $1.4 billion during the same period in 2023. This decline in financial outflows has helped reduce the strain on the country’s foreign exchange reserves and further supported the build-up of external reserves.

According to the Bank of Ghana, this combination of higher export receipts, robust remittance inflows, and lower net financial outflows has contributed to a much-improved balance of payments position. The Bank highlighted that the external sector has strengthened considerably in 2024, with improvements in key indicators, including the trade balance and remittance inflows, all of which have played a role in replenishing the country’s foreign reserves.

The strong performance of the external sector in the first three quarters of 2024, reflected in both the current account surplus and the reduction in net financial outflows, has had a significant positive impact on Ghana’s overall economic position. The country’s gross reserves of $7.92 billion provide a cushion for the economy, helping to stabilize the local currency, manage inflationary pressures, and strengthen investor confidence.

As Ghana continues to recover from the economic challenges faced in recent years, the improvement in external reserves is a positive sign of the country’s growing economic resilience. The increase in reserves also indicates that Ghana has made significant strides toward achieving a more balanced and sustainable external position, which will be crucial in maintaining macroeconomic stability moving forward.

With a current account surplus and a reduction in financial outflows, Ghana is in a much stronger position than it was at the beginning of 2024. The upward trend in reserves offers optimism for the country’s continued growth, providing a buffer against external shocks and strengthening the foundation for future economic development.

Ghana’s gross reserves reaching $7.92 billion by November 2024 is a clear indication of the country’s improved external sector performance. With the current account surplus and a reduction in financial outflows, Ghana’s economy is poised for greater stability in the coming months, and the country’s reserves are expected to continue on their positive trajectory.