Ghana’s Gross International Reserves Decline
The spirited fight put up by civil society groups and economic think-thanks against excessive spending to safeguard the Ghanaian economy amidst the depreciation of the cedi as the country goes into the titanic December elections has hit a snarled.
As Gross International Reserves (GIR) position of the Bank of Ghana (BoG) has dropped from US$4.5 billion in August 2011 to US$4.2 billion at the end of August 2012.
While the country’s GIR increased from US$4.7 billion at the end of December 2010 to $4.8 billion in January 2011, depicting over 3.8 months cover of imports of goods and services as against the current gross reserves of US$4.2 billion (2.4 months of imports cover) recorded at the end of August 2012.
The current gross reserves mean that Ghana now has 2.4 months cover of imports of goods and services as against the gross reserves of US$4.5 billion recorded in August 2011 which can provide cover import for over three months.
His recent Monetary Policy Committee (MPC) of the BoG, the Acting Governor, Dr Henry Kofi Wampah stated; “Total government expenditure including arrears and other outstanding payments amounted to GH¢12.5 billion, compared to GH¢7.8 billion in 2011”.
The major components for the first eight months of the year he mentioned were: wages, salaries and related payments of GH¢6.2 billion, domestic interest payments of GH¢1.1 billion and external interest payments of GH¢300.6 million.
Other payments amounted to GH¢4.9 billion made up of Ministry, Department, and Agency (MDA) drawings and statutory payments namely District Assemblies’ Common Fund (DACF), Ghana Education Trust Fund (GETFUND), National Health Insurance Levy ( NHIL), among others, the economist added.
To this end, government fiscal operations during the period, therefore resulted in an overall cash deficit of GH¢4.1 billion. The deficit, together with a net foreign repayment of GH¢247.1 million and a net payment to DMBs of GH¢478.8 million, created a resource gap of GH¢4.8 billion.
Reviewing the performance of the first eight months of the West African second largest economy, Dr Wampah disclosed that Ghana’s stock of domestic debt at the end of July 2012 stood at GH¢13.7 billion, up from GH¢11.8 billion in December 2011.
The external debt stock declined marginally from US$7.8 billion in December 2011 to US$7.7 billion at the end of July 2012. The total public debt at the end of July 2012 was, therefore, GH¢28.3 billion equivalent to 44.4 per cent of GDP, up from 42.6 per cent GDP at the end of December 2011, but well within the debt sustainability threshold of 60 per cent of GDP, he stated.
According to the acting Chairman of the MPC, total merchandise exports from January to July 2012 grew by 12.9 per cent on a year-on-year basis to US$8.4 billion, mainly driven by high export receipts from gold, cocoa beans and crude oil.
Exports of gold were US$3.5 billion, cocoa beans US$1.8 billion and crude oil US$1.6 billion, while other export receipts, including non-traditional exports, amounted to US$1.5 billion.
Short URL: http://thechronicle.com.gh/?p=47376