Lead Analyst and Research Economist at the Centre for Economic and Business Research (CEBR), Western Washington University, USA, James Mark Gbeda, says although the conflict involving Iran presents a significant risk to global energy prices and inflation, Ghana’s long-term economic stability will depend on how effectively it addresses deeper structural challenges beyond the immediate impact of the crisis.
Speaking on Gold Morning Conversation with Sena Nombo, Mr. Gbeda said every government must pursue policies that reflect its own priorities, noting that while global events influence domestic economies, countries must remain focused on achieving their medium- and long-term development objectives.
He acknowledged that the conflict in Iran poses a downside risk to Ghana’s economy, particularly through rising energy prices, an assessment he said was also reflected in the Bank of Ghana’s latest Monetary Policy Committee report.
“The issue about the war in Iran definitely is a big deal for all governments, including the Ghanaian government,” he said.
However, he argued that the conflict should not overshadow broader economic concerns confronting Ghana.
According to him, although disruptions around the Strait of Hormuz have implications for global crude oil markets, Ghana’s economic policy should remain focused on addressing more fundamental domestic challenges.
Mr. Gbeda observed that rising fuel prices have far-reaching consequences for Ghana because transportation remains central to economic activity, with increases at the fuel pump quickly feeding into the prices of goods and services across the country.
“When petrol prices go up, everything else follows,” he noted, adding that higher transport costs ultimately place upward pressure on inflation and the overall cost of living.
Drawing comparisons with the United States, he explained that although Americans are also experiencing concerns over rising fuel prices, the impact is relatively less severe because the US maintains substantial petroleum reserves and is itself a major oil producer.
“The impact is big, but it’s not as big as, for example, how it will affect Ghana,” he said.
Mr. Gbeda also noted that fuel prices have become a politically sensitive issue in the United States as the country approaches its midterm elections, with policymakers closely monitoring how rising energy costs could influence voter sentiment.
Turning to Ghana, he commended the government’s decision to suspend selected fuel levies and margins following the outbreak of the conflict, saying the intervention had helped cushion consumers from steeper increases in pump prices.
“I think we need to commend the government for that. Otherwise, we’ll probably be seeing petrol prices higher than they are today,” he stated.
The economist stressed that while external shocks such as geopolitical conflicts cannot be ignored, Ghana must continue pursuing sound domestic economic policies that strengthen resilience against global disruptions while tackling the country’s underlying structural challenges.
