Ratings agency, Fitch, is predicting an increase in the Bank of Ghana’s foreign reserves to $7.7 billion in 2025, from $4.4 billion in 2022.

This will put the import cover or months of current external payments to three months.

“Current account surpluses and projected disbursements from international financial institutions will increase Bank of Ghana's foreign reserves by an estimated $1.1 billion per year in 2023-2025, after a $4.4 billion fall in 2022, reaching $7.7 billion (about three months of current external payments) in 2025, from 1.6 months in 2022.”

The rating agency also said non-payment of interest on selected external debt pending a restructuring and a marked reduction in merchandise imports will contribute to an expected current account surplus of 1.1% of Gross Domestic Product (GDP) in 2023, compared with a 2.1% deficit in 2022.

It also forecasts the current account to remain in surplus in 2024 and 2025, although this forecast is subject to developments in external debt restructuring.

This is expected to strengthen the value of the cedi against the dollar.

Meanwhile, Fitch says another round of local-currency debt exchange is unlikely in the near term.  

According to Fitch, the local-currency debt exchanges represent a debt service reduction of ¢52 billion in 2023, about 6% of the estimated 2023 GDP or 39% of estimated 2023 revenue and grants.

Ghana’s gross reserves stood at 1.0 month of import cover in August 2023

Ghana Gross International Reserves (GIR) excluding Encumbered Assets and Petroleum Fund stood at $2.08 billion in August 2023, about 1.0 month of import cover.

According to the Bank of Ghana’s September 2023 Summary of Economic and Financial Data, the reserves grew from $1.406 billion (0.7 months of import cover) in April 2023 to $2.162 billion (1.0 month of import cover) in May 2023 and $2.235 billion in June 2023 (1.0 month of import cover) respectively.

It stood at $2.239 billion (1.0 month of import cover) in July 2023 and $2.089 billion (1.0 month of import cover) in August 2023 correspondingly.