Middle East tensions expose Ghana’s economic vulnerability, lecturer warns
Growing military tensions in the Middle East have once again exposed the fragility of Ghana’s economic foundations, with a University of Education, Winneba lecturer warning that the country’s persistent inability to insulate itself from global shocks is not just a policy failure, it is a national emergency hiding in plain sight.
Dr Bernard Tutu-Boahene, who lectures in political marketing, raised the alarm on JoyNews’ AM Show on Tuesday, March 31, as military exchanges between Israel, Iran, and the United States sent fresh tremors through global energy markets. The closure of the Strait of Hormuz, one of the world’s most critical oil transit corridors, has stoked fears of significant disruptions to international energy supplies, and for Dr Tutu-Boahene, Ghana’s exposure to that kind of distant shock is a problem that has gone unresolved for far too long.
“We have so much in this country in terms of resources, from human resource to material resources. Yet, we seem to be crying anytime there’s a problem,” he said.
At the heart of Dr Tutu-Boahene’s frustration is a contradiction that he argues defines Ghana’s development paradox, a nation sitting on oil reserves that nonetheless remains dependent on imported refined petroleum products, leaving it acutely vulnerable to the very global price swings and supply disruptions that an oil-producing country should be insulated against.
He pointed directly at the weak enforcement of local content laws in the oil and gas sector as a central culprit, questioning why successive governments have failed to leverage Ghana’s crude oil production into a functional domestic refining capacity.
“What happened to our local content law? That even in signing contracts, when it comes to the extraction of crude oil, we don’t really consider local content to the point that it would benefit us,” he said.
His argument on refining is straightforward: processing crude oil domestically would not only reduce costs, by eliminating the long supply chains from Europe and the Americas but would also stabilize availability during periods of global disruption.
“In terms of manufacturing processes and pricing, what we know is that distance factors into pricing. So if distance is reduced, then of course we should have refined products in Ghana a bit less expensive than what is coming from Europe and the Americas,” he noted.
Beyond oil, Dr Tutu-Boahene identified a broader structural vulnerability that runs across Ghana’s entire resource economy. The country continues to export its most valuable natural assets, crude oil, gold, cocoa, in largely unprocessed form, leaving its economic fortunes hostage to the volatility of global commodity markets over which it has no control.
“We know from the past and even present that external factors are something we are not in a position to control, especially crude oil prices, gold prices, cocoa prices, and other resources. And we mostly export them in their rough form,” he said.
His prescription is legislative as much as economic, a parliamentary act that mandates genuine local content compliance and value-chain development across sectors, ensuring that future resource exploitation agreements are structured to benefit Ghana rather than simply extract from it.
“If parliaments can come up with an act that will pay more attention to local content issues, and then probably in future explorations and finding resources and all that, we probably would look at the value chain processes and take advantage of them,” he suggested. “I think that would be a starting point for Ghana to overcome some of these hindrances.”
Dr Tutu-Boahene reserved particular concern for what he sees as the corrosive effect of partisan politics on Ghana’s ability to craft durable economic solutions. When global shocks hit, he argued, the instinct of political actors to exploit the resulting hardship for electoral advantage actively prevents the kind of honest, collaborative national conversation that might actually produce answers.
“When a government is in power, and then it gets to the point where some of these external shocks happen, and it becomes a centre for political campaigning and attacks, it becomes a problem,” he said.
His call was for a deliberate depoliticization of economic strategy, a shared national commitment to addressing structural vulnerabilities that transcends whichever party happens to hold power at any given moment.
“We cannot continue relying on what will happen in Iran, in the Gulf. We cannot continue to suffer from wars that we cannot control,” he stressed. “So if we can all come together to understand some of these things and then give ourselves that kind of opportunity to discuss them fairly, without any political attachments, of course, we will be moving forward as a country.”
It is a call Ghana has heard before. The question, as the Strait of Hormuz closes and fuel prices stir once again, is whether this time it will be answered.
Source: myjoyonline
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