In his last State of the Union address, President Nana Addo Dankwa Akufo-Addo reaffirmed his earlier claims that the current global economic slump is the worst since 1970.
He detailed the terrible effects of COVID-19, the global economic pandemic, and the Russia–Ukraine conflict on the African economy.
He noted that the rise in inflation is not unique to Ghana, but is also being felt in other industrialized nations like the United Kingdom (UK) and the United States (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.
Multiple African nations have seen their inflation rates triple or quadruple in the last two years. Ghana is now suffering its highest inflation rate in 21 years. The poor, particularly those living in cities, are feeling the effects of rising food prices the hardest.
As a result of central banks raising interest rates to combat inflation, he said, the consequences have been felt far beyond national borders. This is because investors in developed countries have been shifting their funds to bonds, while those in developing countries have been selling 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.