President Nana Addo Dankwa Akufo-Addo reiterated his past assertions that the current global economic downturn is the worst since 1970 in his final State of the Union address.
He went into great depth on the devastating effects that COVID-19, the global economic crisis, and the fighting in the Donbass on the African economy.
He pointed out that other industrialized countries like the United Kingdom (UK) and the United States 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, which was held in New York City on Wednesday, September 21, 2022, he made this announcement.
He claims that “economic instability is worldwide,” with inflation being the primary economic threat of 2016. In the last few months, it reached levels not seen in the United States or the United Kingdom for almost four decades. Inflation in the Eurozone is at an all-time high.
Inflation rates in several African countries have tripled or quadrupled during the past two years. The inflation rate in Ghana has reached its highest level in 21 years. The effects of increased food prices are being felt most keenly by the poor, especially those who reside in urban areas.
He said that the effects of central banks hiking interest rates to fight inflation have been felt well beyond national boundaries. This is due to the fact that investors in rich nations have been moving their money into bonds, whereas investors in developing nations have been liquidating their holdings.
He said that because of the decline in value of currencies and the rise in interest rates associated with borrowing, more domestic currency would have to be generated and spent in order to pay off existing international loans denominated in US dollars.
He said, “If there was ever any question, it has been dispelled: the international financial framework is heavily biased against poor and growing countries like Ghana.”
“Large countries have access to channels that would allow them to adopt actions that would reduce strains on their economy, whereas tiny countries have no such access. It is already difficult to meet our financial obligations, and credit rating agencies have been eager to degrade African nations.
Because of the bias of the international money market, we are unable to have access to more affordable borrowing options; as a result, our debt loads continue to grow.
However, he stressed the immediate necessity for reforming the international financial framework to accommodate the requirements of growing and rising nations.