The strong performance of gold resulted in improvement in Ghana’s macroeconomic fundamentals and growth in 2024, Bank of Ghana disclosed on Monday.
Bank of Ghana Governor Ernest Addison said at the Monetary Policy Committee (MPC) press briefing that one of the areas the economy showed positive signs of recovery was in the external side, where the country was able to build strong reserve buffers, contributing to relative stability in the local cedi currency.
He said international reserve build-up in 2024 exceeded the targets under the IMF-backed reforms, with gross international reserves (GIR) increasing to 8.98 billion U.S. dollars, enough to cover 4.0 months of imports.
The GIR by the end of Dec. 2023 stood at 5.92 billion dollars, enough to cover just 2.7 months of imports.
According to him, the performance of the external sector was mainly driven by strong growth in gold exports, which also largely impacted positively on economic growth, adding that the external sector was expected to continue on a strong path of growth with favorable commodity prices amid improved production
Growth exceeded expectation, with the economy expanding at an annual rate of 6.3 percent during the first three quarters of 2024, relative to 2.6 percent during the corresponding period in 2023, said the governor.
“The stronger-than-projected growth and generally improved macroeconomic conditions are spilling over positively to the banking sector,” Addison stated.
“The improvement in domestic macroeconomic conditions will bolster debt servicing capabilities of corporate and household sectors,” added the governor.
To sustain the momentum of recovery and growth, the governor pledged that central bank would continue its strong supervisory role while the central bank monitors commercial banks to ensure that those with capital gaps recapitalize and shore up the availability of credit for the private sector.
Due to the relatively stable macroeconomic environment, the MPC decided to maintain the central bank’s benchmark policy rate at 27 percent.
Amid a severe economic crisis, the Ghanaian government secured approval for a 3-billion-U.S.-dollar loan from the IMF in 2023 to implement reforms and steer the economy toward recovery.