What this means is that the unstable currency in Ghana and the inflation rise across the globe would continue for some time before things take shape.
One can take it or leave it, but the truth is, the global inflation rise was inevitable and there’s no way Ghana could have avoided it, on the cardinal reasons that, during the long lockdowns and Borders closure, the importation of the goods to most countries were curtailed, and those stored all got used during the lockdowns, yet borders were still closed, production output in most companies also decreased to about 20%. This led to finishing all stored products on market.
This automatically meant that, after the Covid lockdowns, most products stored and those on market have already or almost ran out.
This means, that the production of all consumable items needed to double or quadruple to meet the high demand for all items.
In other words, fewer goods on market were being chased by many people, hence, the unabated rise of inflation, because the more the demand for fewer available products automatically leads to inflation rise.
This also means that it would take quite a long time for all production and manufacturing companies to produce enough to equalise the demands on the market for almost all items.
The rise of inflation would only slow down when there is an excess product available on market and to store the rest to control the demand.
That’s only when inflation anywhere would stabilise.
The fact is, every misfortune poses an opportunity for others.
These happenings also present good business for importers and other businessmen.
As the importers try to bring in more goods to meet the demands on the market, more local currency (cedi) has to be converted into dollars to travel outside.
The more there’s demand for the dollar locally, the cedi deprecates.
Until the Bank of Ghana manages to get some external inflows in dollars to shore up the economy for more dollars to be on the market in Ghana for the importers of the goods to access quickly, the cedi would continue to suffer.
The quick solution now is the hope that the IMF support bring quicker foreign inflows, or else the current demand for a few dollars on market would continue to drag the cedi down.
I knew that, even without the Ukraine war, the petroleum price on the World market was automatically going to go up astronomically already anyway, because, during the Covid-19 pandemic lockdowns, most oil production companies virtually ceased production, and production came down to almost zero because vehicular movements stalled, virtually no movement, majority of staff worked from home, by so happenings there was not much demand for fuel, for that the petroleum prices reduced to its minimum because there was no demand for fuel by production companies as well.
Now, as soon as the lockdowns were lifted and workers were asked to stop working from home and go back to offices, production started, people then reverted to using their vehicles to travel to work as there was fear of using public transport due to covid spread, more vehicles hit the roads, then came a rush to the pumps to fill the car tanks.
That rush to the filling stations to buy fuel led to a quick rise in fuel prices because the demand was more than the supply because the oil producers needed to increase their output production to meet the quick demands on the market.
That automatically led to the abrupt corresponding increase in the world market prices of oil.
The thing is, whenever there’s a rapid oil output demand from the drilling fields, there’s always a corresponding quick increase in the world market price.
These things are virtually automatic happenings and no country has control over them, not even UK or the US unless they revert to using reserves to control the price. Ghana could not avoid it.
Then came the Ukraine war which also led to a cut-off in the oil supply from Russia to the world, which also automatically added to the demand for oil across the world.
That subsequently further increased the oil prices worldwide because other oil production fields needed to produce more to shore up to cover for the shortage caused by Russia.
This even led to the command issued by US President l, Joe Biden, to release over 600 million barrels of oil from their reserve to help control the astronomic rise of oil prices in the world.
So when I hear people argue that the Covid-19 pandemic and the Ukraine war should have no bearing on Ghana’s economy, I get so surprised, and I wonder if people really make good analyses of the situation across the world.
In my view, I think the Ghana govt has exceptionally managed things far better than I would have expected if it was the NDC in power today.
The demand for mere changing of the faces of the economic managers in Ghana in itself wouldn’t mean that the inflation rise or the cedi depreciation would suddenly stop.
It takes cool heads and clear direction with focused policies to make the economy work better again, and I have no doubt that the economy would bounce back soon. I am very optimistic about this.
To me, the current situation in Ghana does not require the NPP core members to begin to throw their hands in despair and succumb to the NDC’s cheap propaganda.
Better suggestions are needed not attacks on the government.
Ing. Peter Antwi Boasiako.
Energy Expert, UK.