TOPIC: Considering the Russian-Ukraine war, and its global implications, what will you

advice the President and Government of Ghana to do?

The rippling effect of Russia invading its neighbor country, Ukraine is continually seen and felt
across the globe. Almost every leader in the world and governments including the government of
Ghana has condemned Russia’s invasion of Ukraine. Russian may have its reasons for invading
Ukraine, but the war has already taken a seismic aftershock on the already weak global economy,
which is striving hard to recover from the woes of the Covid-19 Pandemic after the great
depression.

This conflict between the two nations, has gone a long way to add more uncertainties to the
prospects of even and equitable economic recovery, and has led to high inflation pressures
experienced around the world. To be more specific, the rippling effects of this conflict, is seen in
spikes in global oil and gas markets and commodities such as wheat.

For Ghana, the economy of the country even before the conflict was seen as being at risk of debt
distress as a result of increase in interest rates by the United States Federal Reserves and
pressures from rising inflation. It has also become quite difficult for the government of Ghana to
finance its 2022 budget since access to Eurobonds has become increasingly difficult due to the
global downgrades and financial conditions around the world. The conflict has also affected
Ghana’s trade relationship with both countries by significantly disrupting supply chains from the
two countries and from other countries along the borders of the two countries. For instance,
Ghana buys fertilizers from Russia. The conflict in Ukraine has closed this trading window
which has led to the spike of fertilizer in the country. Also, Ghanaians who relied on the
education system in Ukraine are now displaced and back home, meaning that their education and
career has been interrupted by the conflict which will go a long way to affect Ghana as a whole.

In addition, Ghana is facing a high inflation rate and cedi depreciation as a result of this conflict
between Russia and Ukraine. With fuel prices being the main driver of inflation in the country,
spikes in global oil prices significantly escalates inflation in the country. As a result, there has
been an increase in the cost of livening since the prices of items has shot upwards due to increase
in petroleum products prices.
Given this context, when this conflict is prolonged, Ghana is going to face an unpleasant
economic dislocation. But in order for the government of Ghana to improve the country’s
finances and ensure more inclusive growth power, I advise the following:

To begin with, the government of Ghana should try as much as possible to become self-sufficient
and self-reliant. For example, instead of Ghana relying on wheat flour, from Ukraine and other
parts of the world, we could grow and process cassava and corn flour to serve as a substitute to
Ukrainian wheat flour. This self-reliance can be seen in Nigeria in the areas of rice production.

Secondly, Ghana must find other ways to diversify its energy mix to meet the rising demand by
researching and investing into renewable energy resources. This will help the government reduce
the fiscal shocks due to the spikes in oil products around the world and its importation to provide
power for the country and for transportation use. Moreover, the government of Ghana should
also upgrade the Tema Oil Refinery to be able to refine crude oil into its final product rather than
being a tank farm by petroleum products importers.

Furthermore, the government of Ghana needs to makes sure that the procurement systems of the
country are made strong and impenetrable. This can be done by effectively auditing government
institutions both internally and externally to ensure value for money. In order to endure budget
credibility, expenses of the government in areas such as education, health, infrastructure and
social security should deliver operational efficiency.

Finally, the government’s post covid-19 budget should rather be based on measuring outcomes
aimed at reducing poverty and inequality. This is because most budgets developed by the
government always count inputs such as building roads and hospital, which continually puts
pressure on the public purse. When the government is able to capitalize on its competitive
advantage such as digitalization of both government and its services, menace such as corruption
will be reduced drastically and administrative efficiencies of government institutions will
improve.