Our views on the implications of the global trade war for the Ghanaian economy

• Access to the US market will likely weaken with low-to-moderate risk to Ghana’s trade balance. Ghana’s main exports to the US—mineral fuel & oils, cocoa beans, and select non-traditional products—recorded a 28.0% y/y decline to USD 1.2bn in 2024, although yielding a USD 204.0mn trade surplus. With the US accounting for only 3.5% of total exports, the 10.0% baseline tariff poses a limited direct threat to Ghana’s trade balance. In the near term, duty-free access under the African Growth and Opportunity Act (AGOA), set to expire in September 2025, may cushion the impact. However, only 26.0% of Ghana’s US-bound exports qualify under the AGOA programme. Given that 85.1% of Ghana’s total exports remain primary commodities, we anticipate a low-to-moderate risk to the trade surplus, particularly as Ghana pushes to revive cocoa and crude oil production.

 

• A likely softening of demand in key export markets will weigh on Ghana’s trade balance. Ghana’s top five export destinations—UAE (20.4%), Switzerland (20.2%), South Africa (12.2%), China (7.3%), and India (6.7%)—account for two-thirds of total export revenue, underpinning the 6.0% of GDP trade surplus in 2024. However, the heightened US trade barriers against these economies, including 54.0% tariffs on China, 30.0% on South Africa, and 20.0% on Switzerland (and EU markets) will undermine investment and dampen demand. A slowdown in these key markets could weaken their appetite for Ghana’s crude oil, cocoa beans, and non-traditional exports, posing a downside risk to Ghana’s trade balance in the coming quarters.

 

• Gold’s strength will offset oil weakness, supporting Ghana’s trade balance. A tariff-induced concern about likely global economic slowdown triggered a 6.3% drop in Brent crude oil prices to USD 70.1 per barrel as of 03 April 2025. This poses a downside risk to Ghana’s trade balance, as crude oil receipts made up 18.9% of total export revenue in 2024. However, a corresponding decline in the import bill for refined petroleum products will mitigate the impact on the trade account. More importantly, gold continues to shine amid global economic uncertainty, with prices surging 18.7% year-to-date above USD 3,100/oz as of 03 April 2025. Given that gold accounted for 57.0% of Ghana’s export earnings in 2024, its resilience—especially in key markets like UAE (36.5%), Switzerland (36.5%), South Africa (18.0%), and India (8.2%)— will cushion Ghana’s trade balance against potential energy market downturn.

 

• Lower Oil Prices: A fiscal drag but a boon for disinflation. Brent crude oil has averaged USD 74.9 per barrel, aligning with Ghana’s FY2025 budget assumption of USD 74.7 per barrel and a benchmark revenue expectation of USD 818.7mn. However, tariff-induced recession risks threaten further downside for oil prices, posing fiscal challenges as 70.0% of projected benchmark oil revenue is earmarked for CAPEX under the Annual Budget Funding Amount (ABFA). To mitigate revenue shortfalls, we anticipate stricter expenditure rationalization to prevent fiscal slippage, cap borrowing needs, and sustain Treasury yield stability. On a positive note, lower energy prices will aid disinflation, reducing the pressure on the monetary authorities to maintain a higher-for-longer interest rate stance.

 

• Gold’s Strength: A pillar of stability for the Ghanaian Cedi. The Bank of Ghana’s Domestic Gold Purchase Programme has been instrumental in stabilizing the Ghanaian Cedi, anchoring the USDGHS exchange rate at 15.5/USD since February 2025. The bullion rally—driven by uncertainty— has bolstered the BOG’s forex interventions, reinforcing its FX forward sales strategy to sustain currency stability. Additionally, a 2.1% post-tariff drop in the US Dollar Index (DXY) signals broad dollar weakness, which, when combined with stronger gold prices, will further support the Cedi’s resilience in an increasingly volatile global landscape.

 

• Policy Resilience: Shielding Ghana from global shocks. Ghana’s policy framework remains well-positioned to navigate macro-fiscal shocks, underpinned by a renewed commitment to fiscal discipline and a hawkish monetary stance. We believe this pragmatic approach will mitigate external risks stemming from heightened global uncertainty. However, the evolving economic landscape will impose greater caution in unwinding tight monetary conditions, with the timing and pace of policy easing likely to be more measured in 2025.