Ghana still vulnerable to external shocks due to weak economic buffers – Prof Quartey
Economist Professor Peter Quartey has warned that Ghana remains highly vulnerable to external economic shocks because the country has limited buffers to absorb global disruptions.
Economist Prof Peter Quartey has cautioned that Ghana remains highly susceptible to external economic shocks due to its limited ability to absorb global disruptions. Speaking on Joy News' PM Express Business Edition, Quartey highlighted the country's continued dependence on imported processed fuel, despite being an oil producer. This reliance raises concerns about Ghana's resilience in the face of global disruptions.
Following the Bank of Ghana's decision to maintain the policy rate at 14%, Quartey acknowledged a temporary relief for businesses regarding borrowing costs. However, he cautioned that the relief is temporary and depends on the trajectory of global developments. "Oh yes, certainly businesses should be comforted, but temporarily," he said.
"I mean, we should just touch wood, touch wood if nothing happens, if the prices come down, if what is happening in Iran between Iran and the U.S. doesn’t escalate and things get better, then why not?"
Quartey emphasized that Ghana's vulnerability is more pronounced when compared to countries experiencing similar geopolitical tensions. These nations possess reserves that provide protection during global disruptions. In contrast, Ghana lacks a substantial buffer, and any adverse events can have a significant impact on the economy.
He pointed to the country's limited domestic fuel processing capacity as a major weakness, noting that Ghana only processes a small portion of its oil production and continues to import processed fuel.
Furthermore, Quartey expressed concerns about Ghana's continued reliance on fossil fuels, particularly petrol and crude oil, while other countries rapidly transition to alternative energy sources. This dependence on fossil fuels makes Ghana vulnerable to external shocks. Additionally, he cautioned about Ghana's heavy reliance on gold exports, which account for nearly 60% of the country's export earnings.
Should gold prices decline or face instability in the international market, Ghana would be vulnerable to severe consequences.
Written by urgent.news from Joy Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
