Dr. John Kwabena Kwakye has explained that the recent decline in Ghana’s import reserves is largely driven by increased payments for energy imports and other related obligations, assuring that the development is temporary and does not signal a weakening of the country’s external position.
According to him, the reduction in the country’s import cover should be viewed within the context of higher global energy costs, which required the government and relevant institutions to spend more foreign exchange to meet the country’s fuel import needs.
Speaking on the Citi Breakfast Show on Thursday, July 23, Dr. Kwakye told host Bernard Avle that while Ghana’s import cover had declined in recent months, the situation was expected to improve as the government continued to implement policies aimed at strengthening the country’s foreign exchange reserves.
Despite the dip, Dr. Kwakye expressed confidence that the country’s reserve position would continue to improve, insisting that the government remains committed to rebuilding and expanding the reserves as part of its broader macroeconomic management strategy.
“The recent decline in the reserve from 5.7 months of import cover to 5 is due to the high energy-related payments because oil prices went up and we needed more foreign exchange to buy the oil from the oil companies but it will be temporary.
“But we will continue to build it up. The government introduced the Ghana Accelerated and Accumulative Policy and we will continue to build the reserve to even 15 months of import cover going forward and so we should not be worried that the reserve dipped slightly recently.”
Dr. Kwakye’s comments come amid growing public interest in Ghana’s foreign exchange reserves, which are widely regarded as an important indicator of the country’s ability to finance imports, service external debt and cushion the economy against external shocks.
A healthy reserve position also plays a critical role in supporting exchange rate stability and boosting investor confidence
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