Prime News Ghana

Ghana’s overall exports and imports decline due to poor oil performance

By PrimeNewsGhana
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The value of Ghana’s total exports decreased to 9.6 billion dollars in the first eight months of 2020, from 10.6 billion dollars recorded in the same period last year.

This is contained in the Bank of Ghana’s Summary of Macroeconomic and Financial Data for September 2020.

The report also showed a decrease in total imports from 9.1 billion dollars in the first eight months of 2019, to 8.3 billion dollars for the same period this year.

The report attributes the decrease mainly to the impact of COVID-19 on oil prices.

According to the data, the country received 9.6 billion dollars from her exports from January to August 2020, compared to the estimated 8.3 billion dollars it spent on importing goods for the same period.

Both exports and imports for the first eight months of the year declined in value by about 9 percent respectively when compared to the values recorded in the first 8 months of 2019.

Even though the data from the Central Bank showed that Ghana recorded a positive balance of trade as at the end of August 2020, the figure was lower than what was recorded by August 2019.

The general decline recorded across board, can be attributed to the impact of COVID-19 on the price of Brent crude oil over the period under review.

The commodity started the year at 63.7 dollars per barrel, and ended August selling at 45 dollars per barrel representing a year to date drop of 30.9 percent.

The significant drop in the price of oil, saw the value of oil exported by Ghana dropping to 1.9 billion dollars as at August 2020 when compared to the 3.1 billion dollars’ worth of oil exported by August 2019.

Meanwhile, gold exports remained stable from January to August, bringing in 4.3 billion dollars on account of strong gold prices on the international market.

The commodity witnessed a 33 percent surge in its price for the period under review.

Despite a marginal drop in the price of cocoa, another major export commodity of Ghana from January to August, the total value exported for the commodity increased by 14 percent year on year to record 1.7 billion dollars.

An economic analyst with Databank, Courage Kwesi Boti, throws more light on the aforementioned trend.

“This re-emphasizes the need for diversification. But for cocoa and gold, we wouldn’t have had the kind of trade balance we are having for the period. Now, if we diversify our export base more, to include a lot more things beyond these traditional stuff, like more into the non-traditional export like cashew, and things that we would normally export, what that would do is to reduce our reliance on non-commodities or a few commodities. It also showed us how cocoa actually absorbed some of the shocks because cocoa exports year on year actually increased,” he said.