By: Sarah Baafi
Ghana could face rising fuel prices and inflationary pressure as tensions in the Middle East escalate, even though the country’s currency remains relatively stable.
Speaking on GTV’s breakfast show, Member of Parliament for Twifo-Atii Morkwaa, David T. D. Vondee, said the global conflict, particularly involving major powers like the United States of America and oil-producing nations such as Iraq, poses a serious threat to economies worldwide.
He emphasized that the situation cannot be compared to the Russia-Ukraine war, noting that the Middle East crisis directly affects global crude oil supply, with significant implications for fuel prices.
“The scale and impact of this conflict are far greater. It affects a substantial portion of the world’s oil supply, and that has direct consequences for countries like Ghana,” he explained.
His comments come after the Governor of the Bank of Ghana warned that rising geopolitical tensions could undermine the country’s recent gains in controlling inflation.
T. D. Vondee noted that while global crude oil prices are expected to increase, Ghana’s relatively stable exchange rate could help cushion the impact. The Ghanaian cedi is currently trading at around GH¢11 to the dollar, compared to previous periods when it depreciated to GH¢17 or GH¢18.
According to him, fuel pricing in Ghana is influenced not only by international crude oil prices but also by the exchange rate and domestic taxes. As a result, a stronger cedi could limit the extent of price hikes at the pump.
“If the exchange rate had remained high, the impact would have been far more severe,” he stated.
He also acknowledged concerns that inflation, currently around 3 percent, could rise due to external shocks. However, he expressed confidence that sound economic management and fiscal discipline would prevent a return to previously high inflation levels.
“We will feel the impact because we are part of the global economy, but it will not be as disastrous as before,” he added.
He further called for calm, expressing hope that global leaders would work toward de-escalation, as no country benefits from prolonged conflict.
The discussion highlights growing concerns among policymakers that while Ghana has made progress in stabilizing its economy, external shocks, particularly from global conflicts, remain a significant risk to sustaining those gains.
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Source:
www.gbcghanaonline.com