President Nana Addo Dankwa Akufo-Addo repeated his past statement that the current global economic downturn was the worst since 1970 in his last State of the Union address.
He discussed in depth the devastating impact of COVID-19, the global economic crisis, and the battle in the Donbass on the African economy.
He gave an example of other industrial countries such as the UK (UK) and the United States which also experienced an increase in inflation, not only in Ghana (US).
On the second day of the 77th Session of the United Nations General Assembly, held in New York City on Wednesday, September 21, 2022, he made this announcement.
He claims that “economic instability exists across the globe,” with inflation being the main economic threat of 2016. In recent months, inflation has reached levels not seen in the United States or Britain for nearly four decades. Inflation in the euro zone is at an all-time high.
Inflation rates in some African countries have tripled or quadrupled over the past two years. Inflation rate in Ghana has reached its highest level in 21 years. The impact of rising food prices is most felt by the poor, especially those living in urban areas.
He said that the effects of the central bank’s rate hikes to fight inflation had been felt far beyond national boundaries. This is due to the fact that investors in rich countries have shifted their money into bonds, while investors in developing countries have liquidated their holdings.
He said that due to currency depreciation and rising interest rates associated with borrowing, more domestic currency had to be generated and spent to pay off existing international loans denominated in US dollars.
He said, “If there is a question, it has been omitted: the international financial framework is heavily biased towards poor and developing countries like Ghana.”
“Big countries have access to channels that allow them to adopt actions that will reduce pressure on their economies, whereas smaller countries do not have such access. It is already difficult to meet our financial obligations, and credit rating agencies are eager to denigrate African countries.
Due to international money market bias, we may not have access to more affordable loan options; As a result, our debt burden continues to grow.
However, he stressed the urgent need to reform the international financial framework to accommodate the needs of emerging and developing countries.