By Masahudu Ankiilu Kunateh
The Gross International Reserves (GIR) position of the Bank of Ghana increased by $1.6 billion to $4.7 billion at the end of December 2010 and to $4.8 billion in January 2011.
The growth means that Ghana now has over three point eight months cover of imports of goods and services as against the gross reserves of $3.5 billion recorded in July 2010 which can provide cover import for over three months.
Speaking to journalists in Accra over the weekend at a press conference, the Governor of the Bank of Ghana (BoG), Mr. Kwesi Amissah-Arthur revealed that “the bank’s long-term goal is to interest the reserves cover to over six months”, explaining that there are some countries in Africa which have one year reserves cover.
In the last two months, the foreign exchange market has recorded some volatility against the major currencies, reflecting mainly the higher seasonal demand for foreign exchange.
At the end of November 2010, the exchange rate of the Ghana cedi to the US dollar had depreciated by 0.3 percent (year on year). The rate of depreciation increased to 3.1 per cent by end December and to 5.1 per cent in January 201, he observed.
According to him, “Against the pound sterling and the euro the respective appreciations recorded in November 2010 were 8.6 and 13.5 percent while appreciations of 2.0 and 5.7 percent were recorded for December 2010. In January 2011 depreciations of 1.6 percent and 3.2 percent were recorded against the sterling and the euro”.
For the same period in January 2010, the comparative depreciation of the Ghana Cedi against the sterling and the euro were 20.7 and 15.6 per cent respectively.
In trade weighted terms, a nominal effective appreciation of 1.5 per cent was recorded over the December 2009.
Mr. Amissah-Arthur, who is also the Chairman of the Monetary Policy Committee (MPC) of the BoG was quick to say that provisional data on the external sector indicate that total exports for 2010 grew strongly to an estimated US$7.9 billion, an increase of 35.2 per cent over the level for 2009.
While, exports of cocoa beans and products increased by 15.5 percent to US$2.2 billion. Gold exports increased by 49.1 percent to US$3.8 billion, other exports including non-traditional exports increased by 40.7 percent from US$1.2 billion to US$1.7 billion.
Total imports for 2010 amounted to US$10.7 billion, 33.0 percent higher than the value recorded in the same period of 2009. Oil imports amounted to US$2.0 billion or 35.5 percent above the US$1.5 billion recorded the previous year, the Governor disclosed.
During the quarter under review, capital and intermediate goods together accounted for 77.1 per cent of total imports in 2010, compared with 73.7 percent recorded in 2009.
The current account deficit increased to US$2.6 billion compared with a deficit of US$1.6 billion recorded for 2009, he added.
The capital and financial account which captures official and private flows into the economy as well as portfolio investments increased significantly in 2010 by 37.3 percent to US$4.2 billion.
In 2009, the total flows amounted to US$3.1 billion. The above developments resulted in an overall balance of payments surplus of US$1.5 billion compared with a surplus of US$1.1 billion recorded in 2009, Mr Amissah-Arthur emphasized.
The Business Chronicle gathered that at the end of 2010, Ghana’s total public debt was estimated at GH¢17.2 billion (38.6 per cent of GDP or US$11.8 billion). The domestic debt of GH¢8.3 billion accounted for nearly 48 per cent (GH¢8.28 billion) while the external debt amounted to $6.2 billion (20.1 per cent of GDP).