Russia-Ukraine Feud: Ghana’s economy to be negatively impacted – Yofi Grant
The Chief Executive Officer of the Ghana Investment Promotion Center [GIPC], Yofi Grant, has expressed worry over the negative impact the Russia-Ukraine war will have on the Ghanaian economy.
He noted that, even though Russia and Ukraine are not major players in the country’s investment space, the ripple effect of the crisis could adversely affect not only the global economy but Ghana’s as well.
Mr. Grant also indicated that with Russia and Ukraine being significant players in the global oil market, a full-blown war could be disastrous for the economy as the price of oil on the international market will see a huge hike.
Oil prices jumped on Thursday, with Brent rising above $100 a barrel for the first time since 2014, after Russia attacked Ukraine exacerbating concerns about disruptions to global energy supply.
Brent crude rose $7.07 or 7.3% to $103.91 a barrel at 0944 GMT and U.S. West Texas Intermediate (WTI) crude jumped $6.43, or 7%, to $98.53 a barrel.
Brent and WTI hit their highest levels since August and July 2014, respectively.
According to him the hike in the price of oil could have devastating effects on the Ghanaian economy as the government will not be able to absorb the margins that will result from such a hike, which could directly translate into the rise in prices of goods and services in the country.
Speaking in an interview, Mr Grant said the current development makes a strong case for more internal trade and investment.
Read: Russia–Ukraine crisis: President Biden and US allies announce new sanctions
‘’I’m not sure two weeks ago everybody expected that there might be a war which could conflagrate into a global crisis. But here we are today and it happened, and there’s going to be an impact on the global economy and so every country is in jittery. The interesting thing is that I mean the African economy are not that directly correlated with some of these things but the impact is still real.
“There are countries that trade with Russia, there are countries that trade with Ukraine and once Russia has had severe significant sanctions impose on them, it will affect those countries I mean in Africa. So you know we should be worried, we should be worried about the possible impact and countries that we trade with, we trade with the UK, we trade with the US, we trade with Germany, France, China, all of them are worried about the situation in one way or the other’’, he said.
“The attack by Russia is serious and it raises many concerns especially for the global economy, especially since Ukraine is an oil-producing company. And as you have noticed, the oil prices have jumped up above a hundred dollars. So it’s a worrying situation.
“Well in the investment space I wouldn’t say either Russia or Ukraine is a major player in our country. They have in the past, there are investors that have come in but they’re not the major ones. But that notwithstanding it’s still worrying because, you know, there might be areas which they might have interests which could help our economy grow so once there’s such a development and because of that, the doors are shut we should be worried.
“But the worry is more on the global economy than us and once things like that happen like the oil prices have gone up, it has an impact on us. For us it’s a double-edged sword, we’re an exporter and the price of consumption of petrol on the market will go up because oil prices have gone up and I’m not sure government can keep subsidizing and taking the big price hikes over a barrel of oil and subsidizing it for petrol so it’s a worrying development,” he added.
He touted the potential of a more integrated African market to offset some of these unforeseeable challenges in the near future.
According to him, with African markets more integrated under the African Free Trade Continental Agreement, the consequences of such global crisis would not have devastating effects on African economies as this conflict may, should it escalate any further.
