Prof. Fred Dzanku, a Development Economist at the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, has warned that ongoing tensions involving Iran, the United States, and Israel could have significant repercussions for Ghana’s economy, despite improvements in domestic economic fundamentals.

Speaking on Channel One TV’s The Point of View on Wednesday, Prof. Dzanku acknowledged that Ghana’s economic position today is stronger than it was in early 2022, but cautioned that external shocks remain a key concern.

“I doubt if there is anybody, whether a politician or an academic, who will disagree that the fundamentals are different today than they were around February 2022,” he said.

He highlighted several channels through which the conflict could impact the Ghanaian economy. The first is the oil price channel, as disruptions to global supply could drive up crude prices, which historically translate into higher fuel prices at the pump in Ghana.

“The war has an effect on oil supply and distribution and therefore price increases, which we’ve already seen in the news how crude prices have gone up and in my own analysis trying to look at short run effects we see clearly that historically if you look at the data the effects of crude price shocks on our own pump prices,” he explained.

Prof. Dzanku also pointed to the exchange rate as another critical channel, warning that global uncertainty could trigger capital flight and strengthen the US dollar, putting pressure on the cedi.

“Global uncertainty, capital flight and a stronger US dollar could all mean additional pressure on the cedi,” he noted.

He further highlighted the inflationary impact on households, stressing that rising fuel costs and currency pressures could feed into higher prices, particularly for food.

“The third channel is inflation, which is important for households, particularly food inflation,” he added.

Prof. Dzanku’s remarks underscore the need for policymakers to remain vigilant as global developments continue to affect domestic economic conditions.