The Announcer Ghana: Is Ghana Truly Benefiting from Trade, or Is Inflation Hiding the Reality?

Ghana‘s trade performance in 2024 presents a striking contradiction. On paper, the country recorded a nominal trade surplus of GH₵44.7 billion, but in real terms, trade ended in a deficit of GH₵4.7 billion. This disparity raises a critical question from The Announcer Ghana: Is Ghana Truly Benefiting from Trade, or Is Inflation Hiding the Reality?

Trade data over the past three years shows Ghana maintained a real trade surplus, with GH₵1.9 billion in 2022 and GH₵1.4 billion in 2023. However, this trend reversed in 2024, with import volumes outpacing exports when adjusted for inflation.

In nominal terms, Ghana’s total trade value surged to GH₵545.1 billion in 2024, compared to GH₵366.6 billion in 2023. Exports stood at GH₵294.9 billion, while imports reached GH₵250.2 billion. But when adjusted for inflation, total trade flow was significantly lower at GH₵200.6 billion, with exports at GH₵98.0 billion and imports at GH₵102.7 billion.

According to the Ghana Statistical Service (GSS) trade report, “In 2024, Ghana’s real trade values was a deficit of GH₵4.7 billion, in contrast a trade surplus of GH₵44.7 billion recorded in nominal terms. Having recorded real trade surpluses in 2022 (GH₵1.9 billion) and 2023 (GH₵1.4 billion), the trade balance returned to a deficit of GH₵4.7 billion in 2024.”

The difference between nominal and real trade is crucial. Nominal trade values measure the total value of goods and services traded at current market prices. However, inflation and currency depreciation can artificially inflate these figures.

Real trade values, on the other hand, strip out the effects of price changes to reflect the actual volume of goods exchanged. The fact that Ghana recorded a real trade deficit in 2024 despite a large nominal surplus suggests that rising prices and exchange rate depreciation have distorted trade performance.

One of the key factors that could be driving the inflationary impact on trade is the depreciation of the Ghanaian cedi against major foreign currencies. A weaker cedi makes imports more expensive, inflating their nominal values even if the actual quantity of goods imported remains stable or declines. Similarly, export earnings in cedi terms appear larger due to exchange rate effects, even if the volume of goods exported has not increased significantly.

Another major factor highlighted by Accra Street Journal is domestic inflation, which affects the cost of production and trade. High inflation raises the prices of goods and services, making Ghanaian exports less competitive in international markets. At the same time, it increases the cost of imported goods, leading to higher trade expenditures without necessarily reflecting increased economic output.

While the nominal surplus may suggest a strong trade position, the reality is that inflation and currency depreciation have eroded the gains.

Last Updated on June 1, 2025 by samboad