Ghana’s export earnings stagnate at $2.8bn as contribution of cocoa drops by $200m

Ghana’s export earnings has become stagnant as contribution of cocoa drops by $200m.

Ghana’s export landscape appears to have hit a plateau in the early months of 2024, with the country’s major export earnings leveling off at $2.8 billion.

This figure mirrors the earnings recorded in the same timeframe of the previous year, indicating a stagnation in growth despite ongoing global economic adjustments.

Notably, this stagnation comes at a time when Ghana’s expenditure on imports stood at $2.5 billion, leading to a trade surplus of approximately $400 million.

The detailed breakdown provided by the Bank of Ghana in its March 2024 Summary of Macroeconomic and Financial Data reveals a nuanced picture of the nation’s external sector.

Although the trade surplus represents a positive balance, it also reflects a decrease in the proportion of GDP from 1.1% in February 2023 to 0.5%.

Among the key contributors to export revenues, gold continues to lead, generating $1.3 billion, a slight uptick from the previous year’s $1 billion.

Crude oil also showed promising performance with exports totaling $620 million, marking an increase from $551 million in the year prior.

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However, the cocoa sector, traditionally a strong pillar of Ghana’s export economy, reported a significant downturn.

Earnings from cocoa exports plummeted to $508 million from $711 million, translating to a worrying $203 million decline.

This downturn in cocoa’s performance is especially concerning given its historical role as a cornerstone of Ghana’s export economy and a major source of income for thousands of rural households.

The decline could be attributed to a variety of factors including price volatility on the international market, challenges in production, or changes in global demand dynamics.

On the import side, both oil and non-oil imports saw reductions, with oil imports decreasing to $599 million from $674 million, and non-oil imports dropping significantly from $1.9 billion to $1.3 billion.

These changes underscore a shift in the nation’s import patterns, possibly influenced by policy measures or shifts in domestic demand.

The stability of Ghana’s gross international reserves, which sustain the country’s import cover at 2.8 months, alongside a slight increase in Net International Reserves to $3.5 billion from February 2023’s $2.6 billion, offers a cushion against external shocks. However, the stagnation in export earnings, coupled with the notable decline in cocoa’s contribution, calls for a strategic reevaluation of Ghana’s export diversification strategies and enhanced support for key sectors to bolster the nation’s economic resilience.

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