Ukraine war worsens Ghana's macroeconomic imbalance and threatens growth
April 23, 2022, 4:13 pm

Ukraine war worsens Ghana's macroeconomic imbalance and threatens growth

The Russian invasion of Ukraine has negative effects on Ghana (Photo: Pixabay)

The Xinhua reported, Ghanaian expert on Friday (Apr 22) that the Ukraine war has deepened Ghana's macroeconomic imbalances in the short term, threatening its growth in the medium term.

Lesley Dwight Mensah, a research fellow at the Institute of Fiscal Studies, a local economic think tank, told Xinhua that the increasing cost of crude oil in the global market imposed by the conflict had negative consequences on the country's foreign exchange reserves due to the increasing need for foreign exchange for oil and other commodity imports.

He added that the West African country's situation mimicked that of the global economy which was experiencing a difficult recovery from COVID-19.

Russia-Ukraine conflict deepens Ghana's macroeconomic imbalances in the short term, threatening its growth in the medium term (Photo: Pixabay)

The analyst said that "Ghana's economy was in a similar position, recovering slowly from the pandemic, and also facing extreme financial difficulties which began to reflect in macroeconomic imbalances."

On April 13, the Ghana Statistical Service (GSS) announced that inflation had increased to 19.4 percent in March, the highest rate since August 2009.

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Edward Asuo Afram, the head of economic statistics at the GSS, attributed the higher inflation partly to the Russia-Ukraine conflict.

Source: xinhua

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Upon arriving to participate in the summit of the European Political Community, which includes around forty heads of state in Budapest, he said, "I look forward to sitting with the elected U.S. president and seeing how we will collectively ensure we meet challenges, including the threats from Russia and North Korea." He also noted that the strengthening of ties between Russia and North Korea poses a threat to the United States as well, according to reports from Agence France-Presse.

Before Trump's victory, Rutte expressed confidence that a united Washington would remain part of the defensive alliance, even if Trump became the 47th president of the United States. In an interview with German public broadcaster ZDF last Monday night, he stated that both Republicans and Democrats understand that NATO serves not only the security of Europe but also that of America. He added that both candidates are aware that the security of the United States is closely tied to NATO.

On Wednesday, NATO congratulated Trump on his victory but did not address the Ukrainian issue.

It is noteworthy that the relationship between the elected U.S. president and the defense alliance was not the best during his first term in the White House. Trump criticized NATO member states multiple times and even hinted at withdrawing from the alliance unless they increased their financial contributions.

Additionally, the issue of the Russian-Ukrainian war is one of the matters that complicate relations between the two sides, especially since Trump has repeatedly stated that he can end this ongoing conflict, which began in 2022, quickly. He implied that he had a peace plan between Kyiv and Moscow, while his vice president, JD Vance, revealed aspects of that plan, which stipulated Ukraine's commitment not to join NATO, thereby sending reassuring signals to the Russians.

Furthermore, many NATO member states in Europe fear that Trump might halt military aid to Ukraine after he previously criticized the U.S. for pouring funds into supporting Ukrainian President Volodymyr Zelensky.