Ghana's companies sold fewer products overseas for the period January to May, 2014 but the trade deficit narrowed because of a big decline in gold and crude oil imports. The trade deficit narrowed significantly to $156.6 million from January to May 2014, compared with a deficit of $990.8 million in the corresponding period of 2013. It fell by 7.5% ($5.9 billion) from the $6.3 billion recorded in the same period of 2013. This was mainly due to lower earnings in gold and crude oil, the latest Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) disclosed. Exports, which had hit an all-time high in the same period in 2013, edged down 7.5% to $6.3 billion. Gold exports amounted to $1.8 billion as both gold prices and volumes fell by 17 and 7% year-on-year respectively. This compares with gold export earnings of $2.3 billion in the corresponding period of 2013.
The weak prices of gold, in particular, have resulted in lower production volumes posing risks to the external and fiscal outlook. The MPC is monitoring these developments and its impact through the trade and financial channels. Also, crude oil exports declined to $1.6 billion in 2014 from $1.7 billion in 2013 on the back of lower production volumes which fell by 8% although prices inched up marginally by 1.3 percent as explained by the Governor of BoG, Dr Henry Kofi Wampah.
Non-traditional export earnings (including timber and other minerals) remained unchanged at US$1 billion. But cocoa beans and products amounted to $1.5 billion compared with $1.3 billion for 2013, representing a growth of 14.4 percent.Total imports declined to $6 billion for the period under review, down by 17.8 percent compared with $7.3 billion in same period of 2013. This was attributed to a 19.7 percent year-on-year decline in Non-oil imports to $4.6 billion while oil imports fell by 11 percent to US$1.4 billion.
However, analysts expect oil imports to rise in the months ahead. The price of oil rose further in May and is now trading at around $108.20 per barrel. That would likely lead to an increase in the deficit and slow economic growth in the country. But Dr Wampah argued that high private sector credit growth, improved cocoa production and expected addition of gas to the economy should provide some boost to growth conditions in the latter part of 2014 and beyond.