Ghana records coincidental trade surplus in 2017

Ghana has been for a long recording trade deficits. The balance of trade hasn’t been favourable for the import dependent oil producing country. The country is also the second largest producer of cocoa in the world.

However, the country has this year recorded a trade surplus, according to the Bank of Ghana, but a trade expert says it is coincidental.

The central bank reports that developments in the external sector point to significant recovery in exports over the first four months of 2017, on the back of increased production volumes and prices of gold and crude oil. This, together with lower imports, resulted in a trade surplus estimated at 2.5 per cent of GDP, compared to a deficit of 2.2 per cent recorded in same period of last year. 

However, Mr. Dode Seidu, the Managing Principal of Frontier Market Advisors a consultancy firm specializing in trade and investment, told that the country achieving trade surplus isn’t intentional. “It’s more coincidental,” he said.

“The trade surplus registered by Ghana is very significant as the country is heavily import-dependent. High import dependence has contributed to significant deterioration of Ghana’s currency.

The trade surplus therefore implies Ghana has earned more foreign currency from its exports and increased  earnings imply a stronger and stable cedi which is important for predictable trade and investment. This is also significant coming after a presidential election. Our election cycle also coincides with increased capital flight and high government spending,” he said.

By Emmanuel K. Dogbevi
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