The current monetary system is biased against developing countries, hence the President of the Republic, Nana Addo Dankwa Akufo-Addo, has called for an immediate overhaul of the international financial system.
“The financial markets have been set up and operate on rules designed for the benefit of rich and powerful nations, and, during times of crisis, the façade of international co-operation, under which they purport to operate, disappears.” claims President Akufo-Addo.
On September 21st, when it was his turn to address at the UN General Assembly in New York, the President said, “These are the cruel lessons that we have had to learn, as the globe emerged from the grip of the coronavirus to energy and food price spikes, and a worldwide increase in the cost of living.
There is a pressing need for system reform.
He emphasized that “our globe is not in a good condition right now” and cited a World Bank report that said the global economy was “going through its greatest slump since 1970.”
President Akufo-Addo stated that the continent faced unrelenting challenges such as a decline in productivity and revenues, increased pressure on spending, and spiraling public debts as a result of the devastating global economic pandemic that had plunged the world into its worst recession in fifty years.
“As we grappled with these economic challenges, Russia’s invasion of Ukraine burst upon us, aggravating an already difficult situation. It is not just the dismay that we feel at seeing such deliberate devastation of cities and towns in Europe in the year 2022, we are feeling this war directly in our lives in Africa. Every bullet, every bomb, every shell that hits a target in Ukraine, hits our pockets and our economies in Africa,” he stated.
Describing global inflation as “the number one enemy this year”, President Akufo-Addo noted that “it hit a 40-year-high in the US and UK in recent months. There is record inflation in the euro zone. Several African countries have inflation rates surging three to four times higher than what they were just two years ago.”
The President of Ghana stated, “We are currently witnessing the biggest inflation in 21 years.
The poor, particularly those in metropolitan areas, are being worst hit by the rising cost of food.
According to the President, there has been a significant international fallout from central banks hiking interest rates around the world to combat inflation as foreign investors withdraw their funds from emerging economies to invest in bonds in wealthy nations.
He continued by saying that as a result, borrowing rates have climbed and currencies have depreciated. As a result, economies in Africa must produce and spend more of their own money in order to pay off foreign debts denominated in US dollars.
“It has become clear, if ever there was any doubt, that the international financial structure is skewed significantly against developing and emerging economies like Ghana. The avenues that are opened to powerful nations to enable them take measures that would ease pressures on their economies are closed to small nations,” he said.
To make matters worse, President Akufo-Addo noted that “credit rating agencies have been quick to downgrade economies in Africa, making it harder to service our debts. The tag of Africa as an investment risk is little more than, in substance, a self-fulfilling prophecy created by the prejudice of the international money market, which denies us access to cheaper borrowing, pushing us deeper into debts.”
History, the President stressed, “will judge us harshly if we do not seize the opportunity to make the changes that will enable us deal with the many problems we face.”
Touching on the conflict in the Sahel, President Akufo-Addo noted that the conflict has moved from the Sahel, inexorably, to the West African coastal countries, with all of Ghana’s neighbours suffering terrorist attacks, with some losing territorial space to the invading forces.
The terrorist pressure, he explained, the terrorist pressure has provided a pretext for the unhappy reappearance of military rule in three (3) of the fifteen (15) member ECOWAS Community, two (2) of whom have borne the brunt of the terrorist outrages in the Region – Mali and Burkina Faso.
“All of us in the Region are being forced to spend huge amounts of money on security. This is money we should be spending on educating and giving skills to our young people; on building much needed roads, bridges, hospitals and other such infrastructure, which we are spending to fight terrorists or to keep them out from destabilising our countries.”
President Akufo-Addo claims that this is a global issue that requires attention from all nations in order to find a solution on a global scale.