Economist and Professor of Finance at the University of Ghana Business School, Godfred Bokpin, says the US$1.9 billion decline in Ghana’s gross international reserves does not pose an immediate threat to the economy, although it exposes vulnerabilities in the country’s external position.
His comments come at a time when Ghana’s external reserves are facing renewed pressure, despite strong export earnings recorded during the first half of 2026.
Professor Bokpin said the development warrants attention because a significant portion of Ghana’s recent reserve accumulation has been driven by gold export earnings.
He identified the ongoing conflict in the Middle East as one of the external developments that could affect Ghana’s gold export flows.
“There should not be any panic necessarily, because we still have a considerable level of reserves to be able to fight the pressure.”
He also believes the Bank of Ghana may need to reduce the extent of its interventions in the foreign exchange market as part of efforts to preserve the country’s reserves.
Latest Bank of Ghana data show that gross international reserves dropped from US$12.94 billion in June to US$11.07 billion by the end of August 2026.
The decline has subsequently reduced Ghana’s import cover to 4.2 months, down from 5.7 months recorded at the end of 2025.
Professor Bokpin cautioned that Ghana’s heavy reliance on gold as a major source of foreign exchange earnings creates exposure to global developments that could affect gold prices or export volumes.
He also expects demand for foreign exchange to rise in the final quarter of the year, as businesses and government traditionally increase spending ahead of the Christmas season.
According to him, expectations of weaker gold export receipts could encourage market participants to demand more foreign exchange, potentially placing additional pressure on the Bank of Ghana’s reserves.
He therefore called for careful management of the country’s external position, particularly as Ghana enters a period of traditionally higher foreign exchange demand.
“And they know that we have limited reserves. So it’s just about managing it. And I agree with the governor when he indicated a couple of weeks ago that we expect some level of depreciation of the currency, also because of the uncertainty in anticipation of government injecting more liquidity into the economy as they ramp up the year.”
The Bank of Ghana has also identified slower gold shipments, increased external payments and developments in the Middle East as potential risks to Ghana’s external position.
With reserve levels under pressure and potential demand for foreign exchange expected to rise, the outlook will depend on how effectively the country manages its reserves and responds to developments affecting its key sources of foreign exchange earnings.
