Gold propels economy to US$2bn trade surplus in 2020

1 Kilo gold bar

The economy recorded a trade surplus of US$2billion last year, equivalent to 3 percent of Gross Domestic Product (GDP), on the back of strong gold prices, according to latest Bank of Ghana (BoG) data.

The country raked in a total US$14.45billion from its exports against total imports valued at US$12.43billion in 2020, despite the devastating effects of the pandemic which led to reduced cross-border trade and domestic economy activity.

The figures contained in BoG’s January 2021 Summary of Economic and Financial Data show that gold was the highest earner – raking in US$6.7billion, which is about 47 percent of total exports. Oil exports followed with US$2.9billion – 20.1 percent; and cocoa with US$2.3billion – 16.1 percent.

The remaining 16.8 percent came from non-traditional exports which brought in US$2.35billion. Understandably, last year’s total export value was lower than 2019 when the country earned US$15.6 billion against imports of US$13.4billion.

Performance of major Commodities

According to the central bank’s figures, the precious metal finished 2020 at 25.4 percent higher than the previous year’s price of US$1481.3 ounce.  In December, gold price was at a record high of US$1857.2.

Meanwhile, last year was a particularly bad one for crude oil as the pandemic shock, price wars among major producers and their concomitant effects of reduced global economic activity and economic lockdown led to lower demand for crude. Consequently, crude oil lost 22.9 percent of its price, ending December 2020 at US$50.2 per barrel compared to US$65.2 in December 2019.

Cocoa, on the other hand, performed better in 2020 than it did in 2019. It ended last year at a price of US$2581.3 per tonne, compared to the US$2518.4 per tonne recorded in 2019.

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