Ghana’s capital and financial account balance continues to present challenges, with deficits persisting despite some growth in foreign direct investments. Data from the Bank of Ghana reveals that the deficit widened to $5.88 billion in December 2024, up from $4.12 billion in November 2024.
As a percentage of GDP, the deficit stood at -0.7% in December, slightly improved from -0.5% in November, but still underscoring the difficulties in balancing the country’s financial flows.
Foreign direct investments provided some relief, rising to $1.73 billion in December from $1.25 billion in November. This increase reflects ongoing investor confidence in key sectors such as mining, energy, and manufacturing.
However, these inflows were not enough to offset consistent outflows from portfolio investments, which registered a net outflow of $39.3 million in December, compared to $18 million in November.
Historically, Ghana’s capital and financial account balance has struggled to maintain equilibrium. In December 2023, the deficit was $732.6 million, or -0.9% of GDP.
Over the past year, the gap has widened significantly, signaling deeper structural issues in attracting and retaining financial inflows. This persistent deficit highlights the country’s reliance on external borrowing and financial inflows to manage its external obligations.
The overall balance of payments, however, tells a more positive story. A surplus of $3.05 billion was recorded in December 2024, improving from $1.90 billion in November.
This surplus was driven by a strong current account balance and improved foreign reserves, which offered some buffer against the challenges in the capital and financial account.
The trend reveals that while foreign direct investments have shown growth, Ghana’s reliance on such inflows is insufficient to bridge the gap created by outflows in portfolio investments and other financial liabilities.
The slight improvement in the percentage of GDP linked to the deficit, from -0.9% in December 2023 to -0.7% in December 2024, indicates progress, but the widening financial gap remains a concern.
