Middle East tensions put pressure on Ghana’s reserves – BoG Governor

Bank of Ghana Governor Dr Johnson Asiama has highlighted the strain placed on Ghana's international reserves by rising Middle East tensions. Over the past three to four months, the central bank has faced significant challenges in maintaining its reserves, losing US$1.2 billion during this period, according to Dr Asiama. Ghana's international reserves dropped from US$14.1 billion to US$12.9 billion, as reported in the July economic and financial data released by the BoG.

During the second edition of Time with the Governor, a session aimed at engaging students from the University of Ghana and the University of Ghana Business School, Dr Asiama emphasized the importance of robust international reserves for safeguarding the economy against external shocks. He noted that Ghana's efforts to build up its reserves last year have provided a valuable cushion during the current period of global volatility.

"That is why we can say that one of the good things we did last year was to build some high reserves for interesting times like this," he said.

The Governor pointed out that increasing revenue from non-traditional exports, such as cocoa, could help rebuild Ghana's reserves. Currently, non-traditional exports account for about 10% of Ghana's total exports, a figure that should be raised to at least 15% to strengthen the country's external position. Additionally, Dr Asiama highlighted the significance of remittances as another crucial source of foreign exchange, suggesting that a greater proportion of these funds should be directed towards productive investments rather than consumption.