From Hormuz to Ho: How a Gulf war could raise our local food prices

By Joe JACKSON

The next food crisis in Ghana may begin thousands of miles away in a narrow stretch of water between Iran and Oman. The Strait of Hormuz is not a place most Ghanaian consumers think about while buying tomatoes at the market or bread from a neighbourhood bakery.

Yet roughly one-fifth of the world’s oil passes through this narrow maritime corridor. When tensions escalate there, the consequences ripple across global energy markets, shipping routes and insurance costs.

And eventually, they arrive in Ghana’s food markets.

If the current geopolitical confrontation between the United States, Israel and Iran were to evolve into a prolonged disruption of shipping through Hormuz, the effects would not first appear as a dramatic shortage of food in Ghana. The more likely outcome is something subtler but economically powerful: a surge in food prices driven by energy and logistics costs rather than agricultural scarcity.

This distinction matters. Ghana’s vulnerability to global shocks is often framed as a food production problem. In reality, the country’s exposure is increasingly logistical and energy based.

The paradox of calm inflation

At the moment, Ghana appears to be enjoying a rare moment of price stability. Headline inflation has fallen sharply, hovering around 3–4 percent in recent data. For policymakers and households alike, this disinflation has been a welcome reprieve after years of painful price increases.

But there is a paradox in this calm. When inflation has been subdued for some time, even moderate shocks can feel dramatic. A sudden rise in food prices against a backdrop of recent stability tends to be far more politically and economically visible than the same increase during an already inflationary period. In other words, the calmer the waters, the more noticeable the next wave.

How a distant war becomes a local food problem

The transmission channel from a Gulf conflict to Ghanaian markets is not mysterious. It follows a relatively predictable chain:

War → Oil prices → Freight costs → Exchange rate pressure → Food prices.

A disruption in Hormuz would immediately tighten global oil supply and push up energy prices. That increase then cascades through shipping, trucking, cold storage, fishing operations and food processing.

In Ghana, fuel is embedded in nearly every stage of the food system. Diesel powers trucks that move maize from the north to southern markets. Fuel drives fishing fleets and refrigerated storage. Imported staples such as rice, wheat and cooking oil arrive by sea and are distributed across the country by road. As fuel costs rise, the cost of moving food rises. And when transport costs rise, food prices inevitably follow.

The hidden role of SMEs

However, global prices alone do not determine how inflation spreads within Ghana. The real transmission mechanism lies closer to home. Ghana’s food economy is dominated by small and medium-sized enterprises: traders, wholesalers, transport operators, millers, bakers, market women and food vendors. These businesses operate on thin margins and tight cash flows. When costs increase, they respond quickly.

Sometimes they raise prices outright. Sometimes they reduce portion sizes. Sometimes they substitute cheaper inputs. In other cases, traders hold inventory in anticipation of future price increases. These thousands of small decisions collectively shape how global shocks translate into domestic inflation.

In effect, SMEs act as the microeconomic transmission belt through which external shocks enter the national food system. This dynamic explains why food inflation in Ghana often appears first in markets and bakeries rather than in official statistics.

Why fuel policy alone is not enough

In the face of such a shock, governments understandably turn to familiar tools such as fuel price stabilisation or temporary tax relief on petroleum products. These measures can be useful in cushioning the immediate impact of rising energy costs.

But they cannot fully neutralise the underlying problem.

A prolonged disruption in global shipping and energy markets affects more than pump prices. Freight charges increase. Marine insurance premiums rise. Importers face higher financing costs. And exchange rate pressures may emerge as fuel import bills grow. By the time these effects reach domestic markets, inflation is arriving through multiple channels simultaneously. Fuel stabilisation can slow the first wave. It cannot stop the tide.

Watching the markets, not just the data

Another lesson from past shocks is that early warning signs rarely appear first in official data. They show up in markets. Rising transport fares, higher wholesale rice prices, smaller bread loaves and early increases in fish prices are often the first signals that global cost pressures are filtering through the economy. When several of these signals appear at once, it usually means the inflation pipeline is already active.

For policymakers and business leaders, the implication is clear: monitoring the behaviour of traders, transport operators and food processors may be just as important as monitoring commodity prices abroad.

A deeper structural vulnerability

The broader insight is that Ghana’s food vulnerability is not primarily agricultural. The country produces many of its staple foods. The more persistent challenge lies in the cost of moving, storing and distributing those foods within an energy-intensive logistics system. In that sense, a geopolitical crisis thousands of miles away can quickly become a domestic price challenge—not because Ghana lacks food, but because the cost of delivering that food rises.

A strategic reflection

For business leaders, the lesson is to recognise how tightly connected local markets are to global energy dynamics. For policymakers, the challenge is to build resilience not only in food production but also in logistics, energy systems and supply chains. Because the next inflation shock may not begin in a farm field or a grain silo. It may begin in a narrow waterway halfway around the world—and end up reshaping the price of lunch in Ho, Kumasi or Accra.

>>>the writer is CEO, Dalex Finance and Leasing Company PLC

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