Ghana’s current account balance is projected to fall sharply from an estimated USD 1.6 billion in 2024 to USD 700 million in 2025, according to the latest report by Deloitte.
This significant drop, representing over 56%, is largely attributed to challenges in the cocoa sector, which has historically been a cornerstone of the country’s export economy.
Recent data from the third quarter of 2024 reveals the depth of the challenges faced by cocoa production. The sector’s real GDP, measured at constant 2013 prices, stood at 466.2 million Ghana Cedis, contributing only 6.8% to the nominal GDP share of agriculture.
Year-on-year, cocoa’s real GDP growth contracted by 26%, while its quarter-on-quarter performance fell by 5.8%. This decline dragged down the agriculture sub-sector, which grew by 3.2% overall, largely buoyed by crops and livestock.
Deloitte in its report titled “A Sneak Preview of 2025: What Lies Ahead?” said a more than-anticipated decline in cocoa exports could lead to a narrower trade surplus and a decline in the current account balance of the country as Ghana’s current account balance is forecast to decline to USD 700 million in 2025 from an estimate of USD 1.6 billion in 2024.
Cocoa, once the backbone of Ghana’s agricultural exports, is now struggling under the weight of several challenges. Illegal mining activities, known locally as galamsey, have destroyed over 19,000 hectares of cocoa farmlands, severely impacting productivity.
Additionally, the swollen shoot virus and erratic weather patterns have compounded the problem, while smuggling has cost the sector an estimated 160,000 tonnes of cocoa during the 2023/2024 season.
The economic fallout from these issues is stark. In the first quarter of 2024 alone, cocoa export revenues fell by 32.8% compared to the same period in 2023, amounting to a loss of approximately USD 233.6 million.
This decline, coupled with global price volatility, has narrowed Ghana’s trade surplus and increased pressure on foreign exchange reserves, further straining the cedi. The International Monetary Fund has projected Ghana’s current account deficit to widen to -2.2% of GDP in 2025, reflecting these ongoing challenges.
Despite the grim outlook, experts believe there is potential for recovery if targeted reforms are implemented.
