Economist Dr Adu Owusu Sarkodie says the escalating war in the Middle East could unexpectedly boost Ghana’s revenue if rising global oil prices persist.
Speaking on Joy News’ PM Express Business Edition on Thursday, he explained that while geopolitical conflicts often trigger economic shocks, oil-producing countries like Ghana could benefit from higher crude prices on the global market.
“The war in the Middle East is somehow expected, but the war in Europe (Russia-Ukraine) is not.”
He noted that Ghana’s position as a crude oil exporter means price increases in the international market could translate into higher export earnings for the country.
“I have already stated that Ghana also will export crude oil, so when the international crude oil price increases, Ghana stands a chance.”
According to him, if Ghana maintains its current production levels while prices rise, the country could generate more revenue than initially projected in its economic forecasts.
“If we keep the quantity the same, then we stand a chance of getting more revenue than projected.”
Dr Sarkodie said any additional earnings from rising oil prices could be used strategically to cushion vulnerable groups in society from the negative effects of global price shocks.
“So we could use that difference that went for to cushion maybe they’re very vulnerable people in the society.”
He suggested targeted interventions to support transport operators who are often among the first groups affected by fuel price increases.
“More like maybe provide coupons to trotro drivers and to taxi drivers, Uber drivers.”
According to him, such measures could help shield the transport sector from the immediate impact of global energy price volatility.
“So as we are keeping them, we are cushioning them from a possible negative impact of this.”
Despite the potential economic gains, Dr Sarkodie cautioned that the broader implications of prolonged conflict remain uncertain.
“So we are also hoping that the war does not travel that far.”
He noted that Ghana has not yet felt the full economic consequences of the conflict.
“So far, so good, not good in terms of war, but so far, we haven’t felt the impact yet.”
However, he warned that a prolonged conflict could expose structural weaknesses in Ghana’s economy.
“So we are just praying that it doesn’t travel because if it travels for months and years, as the Russian-Ukraine one has been, then we need to really strengthen our economy.”
He stressed the need to go beyond macroeconomic stability and focus on strengthening the real sectors of the economy.
“Not just the stability, but go deep down to the real economy in terms of production, agriculture production, in terms of industrial production and services.”
Dr Sarkodie recalled the supply chain disruptions that followed the outbreak of the Russia-Ukraine war, which affected key commodities used in Ghana.
“It will interest you to know that even when the war broke out in Russia, Ukraine, fertiliser was difficult to find, and prices were rising.”
He said wheat and flour imports also became a major concern for the country.
“Even wheat, the wheat flour, which we used to bake bread.”
According to him, attempts to replace imported wheat with local alternatives met with consumer resistance.
“And the answer was that Ghanaians had developed a taste for the wheat from Ukraine, and that when they use their local wheat, the customers did not demand that much.”
Dr Sarkodie believes the current geopolitical uncertainty should push Ghana to rethink its economic strategy.
“So I think this is the time to revisit the conversations of looking within and looking at the very things that we can really produce.”
He argued that the country must reduce reliance on imports for essential inputs such as fertiliser.
“What does it take to produce a fertiliser? Why should we depend on Ukraine, which is fighting a war for fertiliser and other countries?”
While acknowledging that Ghana’s economy is still developing, he said the country should focus on producing basic goods locally.
“I know our economy is still in transition. Our economy is so young.”
“But there are small, small items like poultry and sugar, small things that we can at least try to produce them in here.”
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