Business News of Sunday, 26 January 2025

Source: www.ghanaweb.com

EXPLAINER: Understanding the term trade surplus

File photo of a crane holding a container at Tema port File photo of a crane holding a container at Tema port

The term trade surplus in business simply means that a country's exports have exceeded its imports.

This is measured over a specific period to track whether a country, such as Ghana, sold more goods and services to other countries than it imported.

It is calculated by subtracting the total value of imports from the total value of exports.

Ghana is known to be heavily dependent on imports, bringing in commodities such as rice, toothpicks, poultry, tomatoes, onions, second-hand home appliances, among others.

However, Ghana is also one of the world's largest producers of cocoa. The country exports cocoa beans and related products, which have generated substantial revenue.

Not to mention gold, whose export has significantly contributed to the country's trade surplus.

In 2024, Ghana achieved a record trade surplus of US$5 billion. According to reports, this was driven by an increase in gold exports.

Total exports rose by 13.6% to $9.2 billion, with gold export revenue surging by 47% to reach US$5 billion.

A trade surplus increases national income and stimulates economic growth.

This is because the government will have enough money to embark on infrastructural and other developmental projects.

Also, when there is a surge in these commodities, jobs will be created as more hands are needed to meet the global demand.

Meanwhile, watch as Eric Opoku announces that the government will subsidize agricultural insurance for farmers



SA/EB

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