Trade Deficit Narrows

Ghana�s trade deficit narrowed significantly for the second time this year, basically due to sharp drop in the oil import bill of the country as well as other products. Similarly, the decline was also due to the impact of a significant change in the hydro/thermal mix in the generation of electricity in favor of hydro, as well as some demand contraction. In May last year, oil rose to its record price ever of $147 per barrel compared to about $70 this year. Oil import bill was estimated at $449.61 million, compared with $1.326 billion for the same period in 2008, a significant annual decline of 66.1 percent. According to the latest Monetary Policy Committee (MPC) of the Bank of Ghana, the merchandise trade deficit narrowed to $868.69 million, compared with $2.155.04 million for the same period in 2008. Last week, the country received a loan of more than $1 billion support from the International Monetary Fund (IMF) to boost its balance of payment and stabilize the economy. And the assistance will definitely help improve the trade shortfall situation. Total merchandised imports was $3.8 billion compared with $5 billion for the same period in 2008, a decline in year-on-year terms of 22.6 per cent. There were relative declines in all the various categories of imports relative to the levels recorded for the first six months in 2008. Importantly, non-oil import slowed down significantly during the first half of the year as it amounted to $3.4 billion which represented a decline of 6.8 percent. This is in contrast with a growth of 39.8 per cent over the same period last year. Capital goods declined by about 11 percent to $717.13 million while consumption goods and intermediate goods fell by 5.5 per cent to $738.04 million and 3.6 percent to $1,633.11 million respectively. On exports, provisional estimates indicated that total merchandise exports for the first half amounted to $3.0 billion, an increase of 5.6 percent, compared with $2.8 billion for the same period 2008. Exports of cocoa and its related products for the first half of the year amounted to $1.060 billion, an annual growth of 16.6 percent compared with $909.96 million in 2008. Also gold exports increased by 1.2 percent, from $1.199 billion in 2008 to 1.213 billion this year, but diamond exports declined significantly, from $29.50 million in 2008 to $3.09 million in 2009. Non-traditional exports also continued to grow despite the global financial crisis. It recorded $610 million for the first half of the year, as compared with $587.47 million last year.