Bank of Ghana (BoG) Governor Dr Johnson Asiama has revealed that tensions in the Middle East have put significant pressure on Ghana’s international reserves in recent months.

He said the country had faced a challenging period as global developments affected its reserves and forced the central bank to provide support to critical sectors of the economy.

“The past three to four months have been quite challenging for us when it comes to the country’s International reserves.”

Dr Asiama added: “I am therefore not surprised that we lost 1.2 billion reserves.”

According to the July Economic and Financial Data released by the Bank of Ghana, Ghana’s international reserves fell from US$14.1 billion to US$12.9 billion.

Dr Asiama disclosed this during Part Two of Time with the Governor, an engagement with students from the Department of Economics, University of Ghana, and the University of Ghana Business School (UGBS).

The students participated in the 131st Monetary Policy Committee Meetings as part of the MPC Educational Observership Programme.

Building up reserves

Dr Asiama used the engagement to stress the importance of maintaining strong reserves to cushion Ghana against global economic shocks.

“This is why we can say that one of the good things we did last year was to build some high reserves for interesting times like this.”

He said maintaining adequate reserves was particularly important at a time of heightened global economic uncertainty.

Dr Asiama described the decisions required to manage such pressures as difficult choices that countries must make when confronted with external shocks.

On rebuilding the reserves, the Governor pointed to the need to increase earnings from cocoa exports and non-traditional exports.

He noted that non-traditional exports currently account for about 10% of Ghana’s exports and argued that this should be increased to 15%.

The Governor also highlighted the potential of remittances to support the country’s reserves and broader economic development.

He made a case for channelling the more than US$8 billion received through remittances into productive investments rather than consumption.