For the first time in years, Ghana’s Gross International Reserves (GIR) have reached a record 4 months of import cover, signaling some relief for an economy that has faced its fair share of challenges.
According to data from the Bank of Ghana, the reserves climbed to an impressive $8.89 billion in December 2024, up from $7.88 billion in November.
This development doesn’t just look good on paper, it means the Bank of Ghana has more room to supply dollars to the market, helping to stabilize the cedi and bring some control to the rising cost of living.
The reserves act as Ghana’s financial shield, ensuring that the country can fund critical imports and meet external obligations. With this increase, Ghanaians could see some relief as a stronger cedi means less pressure on the prices of imported goods, including essentials like fuel and food.
How Trade Played a Role
The numbers indicate that Ghana’s trade balance ended December 2024 with a surplus of $4.98 billion, up from $4.41 billion in November.
This was largely driven by a strong export performance, with total exports hitting $20.21 billion, compared to $18.39 billion in the previous month. Key players? Gold, which brought in $11.61 billion, and oil, contributing $3.86 billion.
On the flip side, total imports also rose, reaching $15.24 billion in December, up from $13.97 billion in November. Oil imports accounted for a significant portion, increasing from $4.09 billion to $4.48 billion.
More Money from Abroad
Ghanaians living abroad also played a big role in boosting the economy. Inward remittances surged to $6.66 billion in December, up from $4.98 billion in November.
This influx of funds helped improve the current account balance, which ended December with a surplus of $3.55 billion, compared to $2.12 billion in November.
Challenges Still Loom
Despite the good news, the capital and financial account balance remained in deficit, widening to -$5.88 billion in December from -$4.12 billion in November. While net foreign direct investments provided some relief, rising to $1.73 billion, portfolio investments continued to record outflows, reflecting uncertainties in the global market.
For the average Ghanaian, this milestone in reserves offers some hope. With the Bank of Ghana in a stronger position to stabilize the cedi, the cost of imported goods could ease, offering some relief to households dealing with high prices.
