- Ghana Faces Severe Economic Risk if U.S. Joins Israel-Iran Conflict, Warns Joe Jackson
Mr Joe Jackson, Chief Executive Officer of Dalex Finance, has warned that any further escalation of the Israel-Iran conflict involving direct military action by the United States could have “dire consequences” for Ghana and other vulnerable emerging markets. Speaking to NorvanReports, Jackson delivered a sobering assessment of the risks Ghana faces if tensions in the Middle East spiral into a full-scale regional war.
“If the US directly strikes Iran again, everything changes. The impact will not be moderate; it will be devastating. For Ghana, the effects will be deeply inflationary, fiscally destabilising, and socially painful,” said Jackson.
His warning follows growing geopolitical anxiety as tensions between Israel and Iran threaten to draw in global powers. Analysts say a military engagement by the United States could shut down key energy corridors like the Strait of Hormuz, through which nearly a fifth of the global oil supply passes daily.
Jackson explained that the first-order effect of a US-Iran war would be a sharp and sustained rise in global oil prices, like we are already seeing, which would be directly transmitted to Ghana’s already fragile fuel market.
“We are already importing refined petroleum at high cost. If Brent crude hits $120 or more, pump prices here could exceed GHS 18 per litre. That would paralyse transport and food distribution and raise the cost of electricity generation,” he told NorvanReports.
The price of crude oil had remained relatively volatile in early 2025, but recent tremors in the Middle East have begun to push futures higher. For Ghana, where fuel prices are market-determined but vulnerable to exchange rate swings, the effect could be catastrophic for household budgets and small businesses.
Jackson warned that a major external shock of this nature would trigger a flight to safety in global capital markets, driving investors to the US dollar and out of frontier currencies like the Ghanaian cedi.
“A US-Iran war would create a wave of risk aversion. Investors will run to the dollar, and that means the cedi will depreciate sharply. This will drive up import prices, balloon our debt servicing cost, and force painful interest rate hikes,” he said.
Ghana’s cedi has already come under sustained pressure in the first half of the year, despite an IMF-supported stabilisation programme. With inflation hovering above 18%, any external fuel to price instability would likely derail fragile macroeconomic gains made in the first and second half of the year.
The consequences for the average Ghanaian could be dire. Higher fuel and transport costs would quickly feed into food inflation, utility tariffs, and general living expenses, eroding purchasing power in a country where wage growth has lagged behind price increases for several years.
“Let me be blunt: a US continuous strike on Iran could make it nearly impossible for the average Ghanaian to afford basic goods. It will take us right back to the economic-crisis depths of 2022,” Jackson warned.
The government may come under pressure to either subsidise prices, worsening its fiscal deficit, or pass on the full cost to consumers, risking social unrest.
According to Jackson, Ghana’s large Middle East diaspora, especially in countries like the UAE, Saudi Arabia, and Qatar, could also face displacement or economic stress if the region is engulfed in conflict. This would translate into lower remittance inflows, a key source of forex liquidity for the Ghanaian economy.
“Remittances are our hidden lifeline. If the Middle East burns, that flow could slow dramatically. It will hit the poorest households the hardest,” he noted.
Remittances reached over $4.7 billion in 2023, according to Bank of Ghana data, helping cushion the country’s current account and providing a vital source of household income.
Asked about what Ghana’s policymakers should do to brace for this potential shock, Jackson urged proactive planning by both the Bank of Ghana and the Ministry of Finance. He also called for greater coordination between African countries to develop a collective risk mitigation strategy.
“We must prepare for the worst. That means bolstering reserves, maintaining monetary vigilance, and seeking strategic petroleum partnerships. But above all, we must hope this war doesn’t happen,” he concluded.
As geopolitical risks mount, the Ghanaian economy finds itself increasingly exposed to external volatility. For now, the hope remains that diplomacy prevails. But should Washington and Tehran go to war, the economic fallout for Ghana may be swift, severe, and deeply destabilising.
