Ghana’s 2023 external position was moderately stronger than the level implied by fundamentals and desirable policies.

Against the backdrop of fiscal consolidation, the International Monetary Fund said strong gold exports, deferred external interest payments and high remittances the Cumulative Assessment narrowed noticeably.

“Strong reserve accumulation through the gold-for-reserves program led to a faster[1]than-expected increase in gross international reserves. For 2024, strong gold export growth is expected to outweigh a sharp drop in cocoa exports, leading to a further improvement in the CA”, it disclosed in its latest Country Report on Ghana.

Finalisation of debt restructure to entrench debt sustainability

The Fund also said finalisation of the debt restructuring and continued implementation of the Fund-supported programme would entrench debt sustainability and support an external position in line with fundamentals and desirable policies over the medium term.

Again, the continued fiscal prudence coupled with structural reforms aimed at diversifying the economy and improving the business environment would help bolster external competitiveness and shift financing of capital investment from debt to Foreign Direct Investments.

Gross reserves recover strongly

Ghana’s Gross International Reserves recovered strongly, from US$1.5 billion in 2022 to US$3.6 billion in 2023 (1.6% of prospective imports), on the back of a very large gold purchasing program by the Bank of Ghana (“gold-for-reserves”).

At the same time, external debt remained high at 50% of Gross Domestic Product (GDP), and Foreign Direct Investments continued to decline further, from US$1.5 to US$1.3 billion.