Gross  reserves  not accurate — Economist
Prof. John Gatsi — Economist

Gross reserves not accurate — Economist

An Economics Lecturer, Prof. John Gatsi says it is erroneous to consistently announce the international reserves of the country in gross figures as that does not give a true state of the country’s import cover.


Instead, he suggested that the preferred figure for public consumption should be the net international reserves to reflect the country’s international reserves.

Prof. Gatsi explained that with the country still not servicing its external debts on account of its debt treatment exercise, a true picture of the reserves covering its import cover should be the net international reserves of the country to sit within the contest of the prevailing economic challenges.

The Bank of Ghana (BoG) had indicated at the last Monetary Policy Committee presser last week that Ghana’s Gross international reserves “position remained strong.” 

It reported that at the end of April 2024, the stock of gross international reserves increased to US$6.59 billion representing 3.0 months of import cover, compared with US$5.91 billion (2.7 months of import cover) at end-December 2023.

Gross International Reserves (excluding encumbered and petroleum assets) also increased to US$4.32 billion, compared with US$3.66 billion at end-December 2023.

Meanwhile, the Graphic Business has observed that, BoG captures the country’s net international reserves in the Summary of Economic and Financial Charts under External Developments. 

For instance in the period under review, the country’s Net International Reserves for the month of April this year, stood at $3.99 billion weeks of import cover. 

However, unlike a specific graph used to depict the import cover for the Gross International Reserves, that for the net was not captured.

“This is nothing to celebrate,” Prof Gatsi said and added that “what the public needs to be told should be the net reserves which is alarming”.

According to him, over the years, the country’s gross international reserves had ranged between three months and three-and-half months and noted that the latest development was nothing to be proud of particularly at a time when the country was not servicing its debts.

Strong buffers

The Economics professor stressed the need for the government to aggressively build up strong buffers to enable it to service its debts when the time was due.

He mentioned buffers established through funds such as the Sinking Fund, which was set up to manage the orderly redemption of Eurobonds and other debt instruments. 

The Contingency Fund was also created to allow government to cope with any unforeseen scenarios or emergencies that it may run into at any point in time. 

“I cannot tell for now if that is being done but I want to strongly advise that we need to build those funds aggressively in our own interest”, he advised. 


In view of the many economic challenges the country was confronted with, it announced in December of 2022 that in the interim, it had some emergency measures necessary to prevent a further deterioration in the economic, financial, and social situation in Ghana. 

It said in a statement posted on the Ministry of Finance website that as it stands, the country’s financial resources, including the Bank of Ghana’s international reserves, were limited and needed to be preserved at this critical juncture.

As a result it sought a suspension of all debt service payments under certain categories of its external debt, pending an orderly restructuring of the affected obligations.

This suspension included the payments on: “our Eurobonds; our commercial term loans; and on most of our bilateral debt. 

This suspension will not include the payments of our multilateral debt, new debts (whether multilateral or otherwise) contracted after 19th December 2022 or debts related to certain short term trade facilities. 


We are also evaluating certain specific debts related to projects with the highest socio-economic impact for Ghana which may have to be excluded. 

This suspension is an interim emergency measure pending future agreements with all relevant creditors,” the statement added.

The processes leading to its finalisation has taken longer and also been more difficult and complicated than expected, raising concerns by analysts as to whether there are any measures being taken by the government to adequately build its buffers to enable it to easily offset the debts as the period for repayment fast beckons.

Other developments

Meanwhile the BoG has reported that on the international commodities market, prices of Ghana’s major exports (cocoa, gold, and crude oil), recorded gains in April 2024. 


Cocoa prices continued to increase, reaching US$10,116.9 per tonne in April 2024, from US$4,235.60 per tonne in December 2023, representing a year-to-date gain of 138.9 %. Crude oil prices increased by 15.2 per cent on a year-to-date basis to US$89.00 per barrel in April, compared to US$77.26 per barrel in December 2023. 

Gold prices also increased by 14.7 % at the beginning of the year to US$2,334.2 per fine ounce. 

Lower surplus

The balance of trade recorded a lower surplus of US$744.3 million for the first four months of the year, compared to a surplus of US$1.39 billion in the corresponding period of last year. 

Total exports increased by 4.9 % to US$5.83 billion driven mainly by significant growth in gold exports and a modest increase in crude oil exports. 


Earnings from gold exports increased by 37.0% to US$2.97 billion, due to higher volumes of exports from small-scale gold production. 

The value of crude oil exports, in comparison, increased by 9.4 % to US$1.27 billion, on the back of both volume and price increases. 

Exports of cocoa, both beans and products, dropped by 49.0 % to US$599.3 million. Other exports, including non-traditional exports, also decreased by 6.0 % to US$981.8 million. 

Total imports increased by 22.2 per cent to US$5.08 billion, driven mainly by non-oil imports which went up by 31.2 % to US$3.53 billion, while oil imports increased by 5.6 % to US$1.55 billion. 

Provisional data for the first quarter of the year resulted in a current account surplus of US$372.12 million.

This represented a 40.8 % decline from the surplus of US$629.01 million recorded in the first quarter of 2023. 

The lower surplus was driven mainly by higher imports, and increased income payments. 

Net income payment was US$727 million for the first quarter of 2024, compared to net income payment of US$508 million in 2023.

Remittances inflow increased sharply to US$1.44 billion, compared with net inflows of US$980 million over the same comparative period. 

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