Not too long ago, every time the Ghanaian cedi took a tumble against the US dollar, there was a ready-made excuse: “It’s the Russia-Ukraine war.” It became the go-to mantra of economists, policymakers, and headline writers alike. That refrain echoed through Parliament, boardrooms, taxi ranks, and marketplaces.
Now, as tensions in the Middle East rise between Israel and Iran, I sense the birth of a new chant—one that may soon be drummed into our ears: “It’s the Iran-Israel conflict.” This refrain, too, will be used to explain rising fuel prices, higher transport fares, escalating food costs, and, inevitably, a weakening cedi.
But must we always be at the mercy of foreign wars? Should distant battles always determine the value of our currency, the price of our kenkey, or the cost of our children’s school fees? Is Ghana forever doomed to dance to drums beaten in foreign lands?
A troubled cedi’s many excuses
Let’s not deny the reality—global conflicts do have far-reaching consequences. The Russia-Ukraine war disrupted global supply chains, raised the cost of imported goods like wheat and fertilizer, and contributed to oil price volatility. Ghana, like many other developing economies, felt the heat.
Yet, how sustainable is a policy approach that simply reacts to each global shock as if it’s a bolt from the blue?
Today, crude oil prices are inching toward $90 a barrel, and analysts warn that a full-blown confrontation between Israel and Iran could push it well past the $100 mark. For a net oil-importing country like Ghana, this spells more forex demand for petroleum products, increasing pressure on the cedi, which is already trading at over GHS 15 to the dollar.
And just like that, a conflict thousands of miles away begins to dictate our economic fortunes—again.
Auntie Muni’s Lesson in Macroeconomics
One hot Wednesday afternoon in Accra, I queued up at the ever-popular waakye joint at Labone, known affectionately as “Auntie Muni’s.” When it got to my turn, I asked for my usual—GHS 50 worth of waakye with wele and gari.
The vendor looked at me, smiled politely, and said, “Senior, wele no dey today. Plus, the gari small. Everything cost now.”
When I asked why, she didn’t miss a beat: “Dollar dey rise, oil price go up. Me, I dey buy beans, rice, gari—everything go high. How I go cook cheap?”
Auntie Muni may not have a degree in economics, but she perfectly understands the cause-and-effect chain: conflict raises oil prices, oil prices affect transport and imports, and that cascades down to the cost of breakfast in Accra.
Ghana’s Economy: Built on Sand or Stone?
There’s an instructive biblical parable in Matthew 7:24–27 about two men—one who built his house on the rock, the other on sand. When the rains came and the winds blew, the house on the sand crumbled. The house on the rock stood firm.
Sadly, Ghana’s economic house still seems to rest on shifting sand—over-dependence on imports, limited industrialisation, weak domestic production, and heavy reliance on primary commodities like gold and cocoa. We build beautiful plans but rarely lay foundations of rock.
It’s time to ask ourselves the hard questions:
- Why does Ghana still import tomatoes and onions when we have fertile land across the north?
- Why do we depend so heavily on foreign rice when our valleys are dotted with abandoned irrigation schemes?
- Why is our export portfolio still dominated by raw materials, instead of processed, value-added products?
The vulnerability of the cedi is merely a symptom. The real disease lies in our lack of economic transformation. As the Akan proverb says: “Sɛ wodua dua wɔ baabi a ɛnyɛ yie a, na woatwa dua foforo wɔ baabi a ɛbɛyɛ yie.” — If you plant a tree and it does not do well, you must plant another one elsewhere where it can thrive.
We must plant new seeds of resilience—locally driven, industrially grounded, and globally competitive.
Turning Pain into Policy
To overcome the impact of external factors, Ghana must do more than adjust fuel prices or appeal to the IMF. We need long-term, consistent, and bi-partisan policies that drive real structural change. A few key areas stand out:
Energy Self-Reliance:
With our oil and gas resources, we should aim to refine most of our crude domestically. The Dangote Refinery in Nigeria is a wake-up call. Why can’t Ghana upgrade and optimize TOR or build a new modern refinery to serve West Africa?
Agricultural Independence:
Let’s go beyond slogans like “Planting for Food and Jobs.” We need serious investments in mechanization, irrigation, post-harvest storage, and local market linkages. The food import bill must shrink.
Manufacturing and Value Addition:
Exporting raw cocoa while importing chocolate makes no sense. We must support agro-processing zones, create local jobs, and capture more value from what we produce.
Forex and Fiscal Discipline:
We need a coherent forex management strategy and disciplined government spending. The Central Bank must have the tools—and political will—to act independently and credibly.
Education to Industry Pipeline:
Our youth must be trained for the skills of the future. Technical and vocational education (TVET) should not be treated as second-tier. We need coders, engineers, farmers, and artisans—not just more graduates with degrees and no jobs.
Leadership for the Long Haul
Too often in Ghana, every election resets the national agenda. Visionary development must outlive political cycles. We must build institutions, not personalities. As another Akan saying goes: “Ɔhene kɔ na ɔhene ba, na asɛmpa da.” — The king goes and the king comes, but good governance endures.
What we need now is not another slogan, not another short-term bailout, but a national consensus on long-term priorities—and the discipline to follow through, war or no war.
Conclusion: Let the Winds Blow—We Must Still Stand
Yes, the Iran-Israel tensions may soon be the newest excuse for our economic woes. But this must not blind us to the truth: until we fix our fundamentals, any storm—however distant—will continue to shake our economy.
Let us remember the words of Jeremiah 29:11: “For I know the plans I have for you, declares the Lord, plans to prosper you and not to harm you.”
Ghana has great potential. But potential must be nurtured, guided, and protected by policy. If we build on rock, the storms will come—and we will stand.
Peter Martey Agbeko is a Communications Specialist, Former Public Servant, and Columnist for Pete’s Column in the Business & Financial Times.
Email: [email protected]
