Economy on positive trajectory; Balance of trade to hit surplus in 2018

GHANA’S economy is on positive trajectory as the nation’s balance of trade is expected to move into a surplus in 2018, the first time in at least two decades, BMI, research outfit of ratings agency Fitch has predicted.

The projection will see a further strengthening of the local currency which is expected to end the year 2016 at GHS4.33 to the US dollar. The cedi began the year 2017 with a rate of GHS4.20 against the American greenback.

According to BMIs report, oil growth which is expected to increase by about 60 percent this year over that of 2016 will significantly boost the country’s balance of trade. Presently, crude oil is trading at US$53.27 and is expected to end the year at US$ 54.0 per barrel.

“Ghana is in the midst of a major increase in its oil and gas production at a time when energy prices are increasing. Our Oil and Gas team is expecting an uptick in oil prices by the end of the year forecasting Brent crude oil to average US$54.0/bbl in 2017, which will improve the country’s terms of trade. Combined with our forecast of a 35.0 percent increase in oil production in 2017, this will see offer tailwinds to the cedi”, the report emphasized.

Continuing, the report noted that “this informs our forecast of a significantly narrowing current account deficit and of real growth averaging a robust 6.0 percent year-on-year between 2018 and 2026 – almost double the 2016 growth rate”, the report stated.

According to the report, the boom in the oil industry will also lower the dependence on commodities such as cocoa, which have suffered from structurally lower prices and given Ghana relatively poor terms of trade in recent years.

Earlier in the year, BMI forecasted that Ghana’s growing exports and relatively weak import growth is expected to see the current account deficit continue to fall from 2.3 percent of GDP to 1.0 percent by 2019. However, recent development in the oil industry has forced the research outfit to review its forecast.

The report said “Oil exports will increase sharply over the coming years after the TEN oilfield came online in August 2016, which we forecast will contribute to production growth of 15.2 percent year-on-year in 2017 and 26.6 percent growth in 2018. In addition to increasing production, export revenues will receive a further boost from higher oil prices”.

The report further stated that Ghana’s gold exports, which is 39.1 percent of all goods exports in 2015 will also receive a boost in 2017, as prices are expected to increase from US$1,248.0 per ounce in 2016 to US$1,300.0 per ounce in 2017, and USD1,400 per ounce in 2018 on the back of increasing global uncertainty.

Finally, the recovery in cocoa prices, expected to begin in 2018, will offer another tailwind to the country’s export revenues, having accounted for 25.4 percent of total goods exports in 2015, it added.

Also, inflows of Foreign Direct Investments will likely see some decline from 2016 levels but will nonetheless remain robust in order to sustain a number of ongoing infrastructure projects to 2019.

By Augustine Amoah

POST TAGS

ABOUT: Nana Kwesi Coomson

[email protected]

An Entrepreneur, Corporate Social Responsibility, Corporate Communications Executive and Philanthropist. Editor-in-Chief of www.233times.com. A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. His first degree is in Bachelor of Arts - Political Science (major) and History (minor) from the University of Ghana. He holds MSc in Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) from the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow who studied at Clark Atlanta University in USA on the Business and Entrepreneurship track.

View all posts by: Nana Kwesi Coomson  

Leave a Reply

Your email address will not be published. Required fields are marked *

ABOUT 233TIMES

233times is a Ghanaian media house which serves as a major source of exclusive interviews ,music and video downloads, news and more.

233times reports on major events,news covering entertainment, politics, sports, business, technology, etc from within Ghana, Africa and beyond.

We have a platform for the amateur artistes to portray their staggering talents ...more...

CONTACT US

For further enquiries, please contact us via our contact us page link: CONTACT

WE ON SOCIAL MEDIA. FOLLOW US


To advertise with us or make enquiries, please visit 233times.net/advertise or call Selorm (Selorm) | Selorm (Nana Kwesi)