Page 4 - AfrOil Week 21 2022

AfrOil COMMENTARY AfrOil

(Photo: Springfield Group)
Will Ukraine war threaten

Ghana’s economic rise?

The West African country is a producer of oil, as well as gold and cocoa, but drought and the war in

Ukraine are eroding those advantages, according to Joe Jackson, the business director of Dalex Finance

GHANA used to be on the list of the world’s JJ: This time it is going to hit Ghana and
least developed countries. No more. Today the the south. It is taking the south because food
WHAT: republic is one of the fastest-growing economies shortages in the north are coinciding with a
Ghana has been one in West Africa. rise in Islamic terrorism and a rise in the cost of
of the fastest-growing Though poor, more children have been going imported foods.
economies in West Africa to school, and more parents have disposable bna: Do you mean imported food like wheat
but is showing signs of income. There is a burgeoning middle class. It is from Ukraine?
serious strain. the world’s second-largest exporter of cocoa and JJ: Yes, that is part of the problem, and now
one of the top ten gold producers. And Ghana India has banned all wheat exports. This will
WHY: is also starting to exploit recently discovered oil be a big problem in urban Africa, where wheat
The country faces and gas reserves. bread has been a staple eaten at breakfast and in
external shocks such as But Joe Jackson, a fellow at Ghana’s Institute the evening, even though wheat is not grown in
food and fuel price rises
stemming from the war of Charted Economists and the business direc- the region. In rural Africa, bread is not eaten as
in Ukraine, as well as tor at Dalex Finance, says the war in Ukraine much and as the price of wheat rises, people will
regional problems such coupled with drought could bring Ghana’s good more easily switch to other foods like yam and
as drought in the Sahel. times to an end in an exclusive interview with rice, some of which [are] grown locally.
NewsBase’s partner service, bna/IntelliNews. bna: So more food will be grown locally,
WHAT NEXT: which is good?
Food and fuel prices Reasons for concern JJ: Yes, but now we get to the far more seri-
could go even higher bna: Ghana has weathered difficult times in the ous problem: fuel prices are a greater concern
if Ghana does not past. Why are you so pessimistic now? to me than the price of wheat per se. Fuel prices
invest in transport and Jackson: We are facing two very serious are driving general inflation in Ghana. In April
infrastructure. external shocks. One is the rising food and fuel inflation reached 23.6% and we should expect
prices related to the conflict in Ukraine; the it to go much higher. There was another round
other is specific to West Africa – the failure of of price increases in May, with transport prices
crops in the Sahel [savanah] region in countries going up by 30%. Ghana’s Public Utilities and
such as Burkina Faso, Niger, northern Nigeria, Regulatory Commission has warned that elec-
and so on. tricity prices could increase by 148% this year
bna: But droughts are not new to the Sahel? and water rates could rise by more than 344%,
JJ: It is way worse this year. Humanitarian which is unsustainable.
aid groups estimated that about 27mn people
are going hungry at the moment and in the next Fuel supplies
three months another 20mn people could join bna: Could Ghana become more self-sufficient
them. West Africa is facing the worst food crisis with fuel?
in a decade. JJ: No. We have a small oil refinery, but it
bna: There were food shortages a decade ago is not even working at the moment. Plus the
in Niger and other Sahel countries but not in amount of oil we export so far is significantly
tropical countries to the south like Ghana. less than the amount we import.

P4 www. NEWSBASE .com Week 21 25•May•2022