According to the president, the conflict, which broke out in February 2022, made an already bad position even worse for African economies, which were just beginning to recover from the COVID-19 pandemic’s consequences.
Akufo-Addo claimed that the conflict directly affected Africa, particularly in the field of food supplies, which in turn, significantly, caused inflation.
“Two years ago, a pandemic of disease caused by an unidentified, hostile virus and a catastrophic worldwide economic pandemic brought our world to a crashing halt.
No longer were only underdeveloped countries concerned about large budget deficits.
“By 2021, COVID-19 had pushed Africa into the worst recession for half a century. A slump in productivity and revenues, increased pressures on spending and spiralling public debts confronted us without relent,” he submitted.
On the specific case of the Russian invasion, even though Moscow insists it was a military operation, Akufo-Addo stated: “As we grappled with these economic challenges, Russia’s invasion of Ukraine burst upon us, aggravating an already difficult situation.
“It is not just the dismay that we feel at seeing such deliberate devastation of cities and towns in Europe in the year 2022, we are feeling this war directly in our lives in Africa.
“Every bullet, every bomb, every shell that hits a target in Ukraine, hits our pockets and our economies in Africa. The economic turmoil is global with inflation as the number one enemy this year,” he added.
Goverment has routinely explained that recent economic headwinds are attributable largely to the ravages of the COVID-19 pandemic, the ongoing Russia-Ukraine war and the banking sector clean-up.
The rippling effect has been an increase in the cost of living, record high inflation rates and downgrades of the economy by rating agencies such as S&P and Fitch – a situation which has dealt a heavy blow to government’s ability to access the international capital market.
The Cedi has also been on a free fall compelling the Bank of Ghana to resort to hiking its monetary policy rate to deal with the situation.
The worsening economic situation compelled the government in July to initiate contact with International Monetary Fund for an economic support programme.
Ghana is said to be targeting an amount of US$3 billion over three years from the International Monetary Fund once an agreement on a programme is reached. The new amount requested as a loan was double the government’s initial target of $1.5 billion.
Government hopes to complete negotiations by end of the year in order to receive the funds in the first quarter of next year.