Ghana’s Balance of Payment (BoP) at the end of March 2021 recorded a deficit of $429.9 million.
The recorded deficit according to the May 2021 Summary of Economic and Financial Data of the Bank of Ghana (BoG), represents 0.59 percent of current Gross Domestic Product (GDP).
Same period last year, the country’s BoP posted a surplus of $1.47 billion representing 2.22 percent of GDP. A current account deficit of 0.5 percent of GDP accounted for the 0.59 percent deficit recorded in the country’s BoP as at end-March 2021.
Trade balance – difference between exports and imports – which forms a major component of current account posted a surplus of $621 million (0.9% of GDP) at end-March 2021. Recorded surplus in the country’s trade balance was on the account of increased exports of cocoa, gold and oil.
Revenue accrued to government from total exports amounted to $3.9 billion in March 2021, which expanded further to $5.1 billion in May 2021.
Value of total imports also grew from $2.7 billion in March to $3.6 billion in May this year.
A country’s current account is made up of its trade balance, remittances and dividends from foreign financial assets such as stocks.
Since the country’s trade balance is positive, the recorded deficit in the current account might be due to a decline in the value of the other two components; remittances and dividends – remittances for 2020 marginally increased to $3.6 billion, but no official data for the period between January to May has been provided.
The other component of the BoP – Capital and Financial Account – posted a surplus of $16.7 million.
The recorded surplus however represents a significant reduction from the $1.53 billion recorded for same period last year.
Despite the recorded surplus, Foreign Direct Investment (FDI) which forms a major component of Capital and Financial Account decreased from $1.3 billion in December 2020 to $411 million in March 2021.
Meanwhile, recorded Gross International Reserves (GIR) for end-March 2021, amounted to $10.9 billion providing 5.1 months import cover for the country.