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Ghana Balance of Trade and Payments
Despite efforts under the ERP to stabilize the country's
balance of payments, Ghana's current account remained in deficit
throughout the 1980s and into the early 1990s. Both trade and
services deficits continued into the 1990s, given the country's
dependence on concessional inflows and IMF funding. The current
account deficit fell by US$91 million in 1986 from US$134 million
in 1985, but it rose again by US$54 million in 1987. After another
recovery in 1988, it was back at US$99 million in 1989 and widened
to US$228 million in 1990, US$253 million in 1991, US$378 million
in 1992. It was projected to fall to US$190 million in 1994 (see
table 10, Appendix).
The government did succeed, however, in building up at least
some external reserves. By the end of 1991, official foreign
exchange reserves totaled US$538 million, more than double the
level at the end of 1990 and the highest amount for at least a
decade. The increase resulted from the Bank of Ghana's attempt to
boost reserves to cover more than four months' imports. For
example, the government allowed exporting companies to retain some
of their foreign exchange earnings inside the country. For Ashanti
Goldfields Corporation, the portion is 45 percent. Exporters of
other products, except cocoa, may keep up to 35 percent of earnings
in retention accounts, and the Ghana Cocoa Board may keep 10
percent. The retained export earnings can be used for the import of
equipment, spare parts, and essential inputs as well as for meeting
the exporters' external financial obligations. By late December
1991, foreign exchange reserves were sufficient to finance almost
twenty weeks of imports. In 1992 foreign exchange reserves dropped
to US$291.6 million because the government had to use its reserves
to cover current foreign obligations. By September 1993, the
foreign exchange reserve totalled US$276.9 million.
Foreign assets and liabilities of the Ghanaian banking system
as a whole showed a positive trend. Compared with the first half of
1991, Ghana's assets with reporting banks rose by 14.7 percent to
US$1 billion in the second half of the year. Assets at the end of
1991 were 12.7 percent higher than the US$923 million on hand at
the end of 1990. Liabilities also rose significantly from US$368
million to US$437 million during the first half of 1991 and by 25.9
percent during the year as a whole. Overall, however, there was a
positive net increase. Net assets stood at US$603 million at the
end of 1991 as against US$539 million in June 1991 and US$576
million in December 1990.
Data as of November 1994
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