Ghana's trade surplus has been significantly impacted by a decrease in cocoa exports, leading to concerns about the stability of the country's currency, the cedi.

According to the Bank of Ghana, the trade surplus for January and February fell by 54% compared to the same period last year, amounting to $392.8 million. Revenue from cocoa exports also experienced a sharp decline of nearly one-third, reaching $508.4 million during this time frame.

This decline comes despite a considerable increase in New York cocoa futures prices, which have more than doubled this year to $8,939 a ton. The surge in prices has been driven by reduced production in West Africa due to adverse weather conditions, diseases, and a shortage of fertilizers, setting the stage for a third consecutive year of cocoa bean shortages in the global market.

Ghana's cocoa harvest for the 2023-2024 season, projected to range between 650,000 tons to 700,000 tons, falls short of the initial forecast of 850,000 tons, as reported by the Ghana Cocoa Board.

The revenue shortfall from cocoa, a key export commodity for Ghana and the world's second-largest producer after Ivory Coast, exacerbates the challenges faced by the cedi.

Already experiencing an 8.3% depreciation against the dollar since the beginning of the year, the cedi ranks as the third-worst performing currency among 24 African currencies tracked by Bloomberg. On Friday, the cedi weakened further by 0.2% to 13.045 per dollar.

Additional economic and financial indicators highlighted in the Bank of Ghana report include:

Total exports in the first two months of 2024 rose by 1.6% to $2.9 billion year-on-year (y/y), while imports surged by 26% to $2.5 billion.

Gold exports increased by 16.6% to $1.3 billion, and oil shipments grew by 12.4% to $620 million.

Gross international reserves expanded by 4.6% to $6.2 billion, covering 2.8 months of imports, unchanged from the previous year.

The budget deficit for 2023 narrowed to 3.3% of gross domestic product (GDP) from 8.3%.

Public debt, excluding state-owned enterprise loans, rose to 610 billion cedis ($46.76 billion) in 2023 from 446.3 billion.

The debt-to-GDP ratio decreased to 72.5% compared to 73.1% y/y.

Total loans by banks increased to 74.8 billion cedis by the end of February, up from 73.5 billion a year earlier.

Annual loan growth slowed to 1.8% from 30.7% y/y.

The capital adequacy ratio rose to 13.6% from 12.6%.

Non-performing loans increased to 24.6% from 16.6%.

Monthly mobile money transactions surged to 195.8 billion cedis in February from 134 billion cedis a year earlier.