The Minister for Finance, Honourable Ken Ofori-Atta has said, the Russia and Ukraine conflict has impacted negatively on Ghana’s economy.
Linking the worst performing Ghana cedis among fifteen (15) top African currencies to the Global and Domestic Economic Development, the endowed Finance Minister said, the recent conflict between the two neighboring countries is affecting the economic situations in Ghana.
He believes that, the Russia-Ukraine war and the Coronavirus pandemic aside Parliament’s inability to approve key proposals in the 2022 budget are the major forces shaping global events, especially Ghana.
“With the virus, the records show that our decision to focus first on protecting lives and then livelihoods has paid off. By February, globally some 7.03% of those infected by Covid-19 had died. For Africa the figure was 4.03% (251,444 people). In comparison, less than 0.89% (1,445 people) of infected people died in Ghana.” He said.
Ken Ofori-Atta said, against all odds, but due to firm leadership, bold initiatives and responsive citizens, Ghana has so far “collectively” managed the virus remarkably well.
That notwithstanding, the Finance Minister explained that, everyone knew that Ghana, like most countries in the world, had a tall
list of coronavirus-induced bills to pay from 2020 and 2021 and came out with plans and policies to boost investor confidence and job prospects for 2022 and beyond. “As you recall, we lost GH¢13.1 billion of revenue and had to increase our expenditure by GH¢14.2 billion with combined fiscal impact of GHS26 billion (6.8% of GDP)”
Speaking at a press briefing to outlined President Nana Addo Dankwa Akufo-Addo’s government cabinet decision on how to help mitigate the economic challenges in Ghana, the Finance Minister noted that, “for government, 2022 was now the time to go full steam ahead in healing the economy to create jobs, especially for our young generation. This was evidenced by our growth figures, averaging 5.2% in 2021 up from 0.4% in 2020 and a startling 6.6% growth in the 3rd quarter of 2021.”
Explaining further, he said, the launch of the attack on Ukraine by Russia on February 24, 2022 has caused Ghana’s economy. “The war in Ukraine could not have come at a worse time for the global economy. Already global efforts toward economic recovery from the devastation wreaked by the Coronavirus pandemic were being disturbed by supply chain disruptions, surging inflation, and uncertainties in the financial markets, with anticipated hikes in interest rates.”
The Minister expressed worry by saying that, after February 24, Government saw a sharp hike in global oil prices, food price
shocks (especially wheat), oil and gas price hikes, capital risk aversion/flight to safety, affecting private capital flows to emerging markets as a whole, and all with serious macro-economic implications.
A critical instance is crude oil prices (per barrel) increased by 75.3% from US$74.17 in December 2021, when the 2022 Budget was passed to US$130 on 7th March 2022, before ‘moderating’ to US$115 as today 24th March 2022.
He added that, crude oil prices crossed the US$100 mark for the first time since September 2014.
“We recall that prior to the pandemic, we had built resilience through the implementation of bold and prudent economic measures”