President Nana Addo Dankwa Akufo-Addo reiterated his earlier assertions that the current global economic crisis is the worst since 1970 in his final State of the Union address.
He delved into the devastating effects that COVID-19, the global economic crisis and the fighting in Donbass have on the African economy.
He highlighted that other industrialized countries like the UK (UK) and the US are also seeing an increase in inflation, not just in Ghana (US).
On the second day of the 77th Session of the United Nations General Assembly, held in New York City on Wednesday, 21 September 2022, he made this announcement.
He states that “economic instability is worldwide”, with inflation being the main economic threat in 2016. In recent months, it has reached levels not seen in the United States or the United Kingdom for nearly four decades. Inflation in the eurozone is at an all-time high.
Inflation rates in several African countries have tripled or quadrupled in the last two years. The inflation rate in Ghana has reached its highest level in 21 years. The effects of rising food prices are being felt most keenly by the poor, especially those residing in urban areas.
He said the effects of central banks raising interest rates to fight inflation were felt far beyond national borders. This is due to the fact that investors from rich nations are shifting their money into bonds, while investors from developing countries are liquidating their holdings.
He said that due to the devaluation of currencies and rising interest rates associated with borrowing, more domestic currency would have to be generated and spent to repay existing international loans denominated in US dollars.
He said: “If there was ever any doubt, it has been dispelled: the international financial structure is heavily biased against poor and growing countries like Ghana.”
“Large countries have access to channels that would allow them to take actions that reduce pressures on their economy, while small countries do not. It is already difficult to meet our financial obligations, and credit rating agencies are eager to downgrade African nations.
Due to the bias of the international money market, we cannot access more affordable borrowing options; as a result, our debt burden continues to grow.
However, he stressed the immediate need to reform the international financial structure to accommodate the needs of growing and rising nations.
Source : ghananewss.com