Ghana’s current account deficit will narrow to 2.8% of Gross Domestic Product in 2022, from 3.2% in 2021. 

According to Fitch Solutions, this marks a revision from its previous 2022 projection of a deficit of 3.1% of GDP, reflecting weaker-than-anticipated merchandise import growth of 7.7% year-on-year over the first four months of 2022, while exports grew by 17.1%.

It said elevated global commodity prices will cause Ghana's trade surplus to widen in 2022. 

Supply disruptions and risk-off sentiment following Russia's invasion of Ukraine have increased prices of crude oil and gold - Ghana's two leading export commodities together accounting for roughly a third of total exports - and in turn Ghana’s export earnings.

“From a volume perspective, however, a projected decline of 1.3% in oil output in 2022 indicates that Ghana will not be able to reap the full benefits of elevated energy prices”.

“In contrast, we expect gold production to expand by a healthy 4.0%, supported by the start of new gold mining projects and the integration of artisanal miners into Ghana's formal gold mining sector. Taking these dynamics into account, we project merchandise exports to increase by a robust 26.9% over 2022, up from 1.8% in 2021”, it added.

Weak economic dynamics will cap import demand

Meanwhile, Fitch Solutions said weak economic dynamics will cap import demand. 

It said elevated inflation - which reached 31.7% year-on-year, and tighter monetary conditions are leading to deteriorating financial conditions for households and businesses.

These dynamics, it added, will lead to lower demand for imported consumer and capital goods. “As such, we expect merchandise import growth to remain well below export growth, at 15.0%, over 2022. Overall, we see the trade surplus widening to 4.4% of GDP in 2022, from 1.4% in 2021”, it mentioned.