Ghana’s Trade Surplus Declines Despite Continued Export Growth

Ghana posted a trade surplus of GH₵3.9 billion in the third quarter (Q3) of 2024, continuing its positive trade balance trend for the year. However, this surplus marks a decline from the GH₵6.1 billion surplus recorded in the previous quarter (Q2) of 2024, according to the latest report from the Ghana Statistical Service (GSS).
Strong Export Performance
The total trade value for Q3 2024 stood at GH₵145.7 billion, comprising GH₵74.8 billion in exports and GH₵70.9 billion in imports. The trade surplus was largely driven by a notable increase in gold exports, which made up 62.1% of total exports. Year-on-year, gold exports rose by GH₵27.8 billion, further solidifying the country’s dominance in the export market. Gold has long been Ghana’s most significant export commodity, and its growth continues to shape the country’s trade balance.
Following gold, crude petroleum emerged as the second-largest export, accounting for 15.5% of the total export value. Other significant exports included cocoa paste, manganese ores, and tuna, which together contributed 5.6% to the overall export mix. Ghana’s export performance highlights the country’s reliance on a few primary commodities, especially gold and petroleum, which remain pivotal in the trade landscape.
Import Trends and Major Trading Partners
On the import side, mineral fuels and oils dominated, accounting for 22.3% of total imports. Within this category, gas oil and motor spirit topped the list with a combined value of GH₵12.9 billion. Other prominent imports included machinery, electrical equipment, and cereal grains. These imports highlight the country’s need for industrial and agricultural inputs, which are crucial for sustaining its economy.
China continued to be Ghana’s largest source of imports, contributing 24% of total imports, while the United Kingdom followed with 8.2%. In terms of exports, the United Arab Emirates (UAE) remained the leading destination, receiving 25.1% of Ghana’s total exports, primarily driven by gold shipments. The UAE’s role as a key export partner reflects the importance of gold in Ghana’s trade sector.
Inflationary Pressures on Trade Performance
Although Ghana’s nominal trade surplus for Q3 2024 seems promising, real trade figures adjusted for inflation paint a more complicated picture. When inflation is factored in, the country recorded a trade deficit of GH₵4.6 billion. Real export values stood at GH₵23.0 billion, compared to real imports of GH₵27.6 billion. This reveals that the rising prices of exported goods, particularly gold, have significantly impacted the overall trade balance.
The export unit value index (UVI) surged by 53.9% year-on-year, driven by global commodity price increases. Import prices also saw a rise, though at a slower rate of 26.3%. Gold, in particular, saw a sharp price increase, with its export price climbing by 73.8% compared to the same period last year. This rise in gold prices has played a crucial role in maintaining the country’s positive nominal trade balance, although it has also contributed to inflationary pressures on the real trade data.
Future Outlook
Ghana’s trade dynamics reveal the significant role that commodity prices, particularly gold, play in the country’s economic performance. While the country has benefited from a strong export performance, the inflationary pressures indicate that future trade balances may be more volatile. The increased costs of both exports and imports have put a strain on the real trade figures, leading to a trade deficit when adjusted for inflation.
Looking forward, the challenge for Ghana will be to diversify its exports and reduce its dependence on a few key commodities, such as gold and crude oil, which dominate the country’s trade performance. As global commodity prices continue to fluctuate, Ghana will need to find ways to stabilize its trade balance and mitigate the impact of inflation on its economy.
While Ghana’s nominal trade surplus for Q3 2024 indicates strong export growth, particularly in gold, the real trade data highlights challenges related to rising export and import prices. Moving forward, the country will need to navigate these challenges while striving for diversification and sustainable trade growth.