Trade deficit soars in Ghana

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Ghana’s central bank governor, Dr Paul Acquah, on Monday announced that the West African country’s trade deficit had widened and was hovering around the US$1 billion mark in the first quarter of the year compared with a deficit of US$617.8 million for the same period last year.

He told a press conference in Accra that while total merchandise exports for the period amounted to US$1.3 billion, imports were US$2.3 billion, with all categories of imports moving up.

Oil imports amounted to US$526.8 million and accounted for some 23 percent of to tal imports compared with US$346.1 million (21 percent of total imports) recorded for the same period in 2007, he said, and attributed it to the increased oil bill as a result of the increasing prices on the world market.

Imports of refined petroleum products amounted to US$183.9 million, indicating a growth of 15.8 percent on year-on-year basis.

Non-oil imports amounted to US$1,747.1 million and accounted for about 77 percent of total imports in the first quarter of 2008, compared with US$1,313.3 million (79 percent) for the same period in 2007.

Exports of cocoa beans and products, Ghana’s chief export, amounted to US$401.5 million, higher than US$382.27 million recorded for the same period in 2007.

However, cumulative cocoa purchases through the end of the first quarter totalle d some 552,312 tonnes, against a target of 634,000 tonnes for the crop season, and 510,609 tonnes for the corresponding period of the 2006/2007 crop season.

Gold exports totalled US$608.9 million as against US$395.0 million recorded for the same period in 2007, while non-traditional exports comprising horticultural p roducts and handicrafts, among other things, rose 27.1 percent to US$258.8 million, compared with (US$203.6 million) for the corresponding period in 2007.

Dr Acquah said preliminary estimates indicated that the current account recorded a deficit of US$725.8 million, compared with a deficit of US$422.9 million for t he same period in 2007.

The overall balance of payments deficit is estimated at US$528.4 million for the first quarter of 2008, compared with a deficit of US$335.1 million for the same period of 2007.

Gross International Reserves (GIR) at the end of April 2008 were US$2.19 billion, and translates on average into goods and services import cover of 2.7 months.

Meanwhile, the Monetary Policy Committee (MPC) has increased the prime rate, the rate at which the central bank lends money to the banks, from 14.25 per cent to 16 per cent, citing the threat posed to the economy by increasing oil prices and high inflation.

Dr Acquah said the increase in the rate was necessary to ensure a stable macro-economic environment, which was essential for the long-term growth of the economy .

He said while the general assessment of economic prospects remained strongly pos itive, the uncertainty about inflation had weighed down business and consumer co n fidence.

Inflation went up from a low of 10.2 per cent in September last year to 15.3 per cent in April 2008, driven by rising crude oil and food prices.

He expressed optimism that the Gross Domestic Product (GDP) rate of 6.3 per cent set in the budget would be attained by the end of the year.

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