Author: Mr Karoli Ssemogerere is an Attorney-at-Law and an Advocate. What you need to know:
Countries are facing pressure on the capital account dealing with rising energy prices. Oil prices long in decline from 2014 to-date are trading at 2 and ½ times what they were predicted to be in this time period.
Ghanaian president Nana Akufo-Addo had a difficult interview on BBC this week where his interviewer pressed him on the dire straits his country finds itself in. The interviewer went further saying the Ghanaian cedi was the second worst performing currency in 2022 after the Russian ruble. Ghana foreign exchange risk is notable.
In 2006 Ghana devalued its currency and issued the new cedi. Zambia, when the currency coffers ran dry did the same in 2013. Uganda was in the same situation in May 1987 when its treasury ran dry and clawed back the existing local unit carefully packaged as an economic stimulus and nationwide 30 percent tax.
Countries are facing pressure on the capital account dealing with rising energy prices. Oil prices long in decline from 2014 to-date are trading at 2 and ½ times what they were predicted to be in this time period.
Dominant market players and deregulation has unloaded on consumers in the industrial north eye popping prices at the pump, in industry and for domestic use. It appears the net effect of a third winter wave in March complicated matters.
Russia is enjoying all of this. It is dictating payment terms for natural gas supplies forcing European countries to look as far as Tanzania with its vast liquefied gas reserves. Natural gas cargoes are very bulky but Europe’s reliance on Russian gas that dominates supplies in Europe has exactly turned out to be the security threat it was meant to be. Russia is asking for rubles to shore up its currency collapsed by economic sanctions and complaining consumers will have to comply. Russia and Ukraine are also spiking the grain, cooking oil market, fertiliser market.
The French presidential election is closing on domestic outrage at rising prices. In Tigray, Ethiopia the price of flour used to make injeri the bread staple is forcing the population into foraging for wild berries to supplement food. Even Uganda known as the region’s food basket is reporting higher food prices, higher fuel prices and lower production (as it appears the rains have failed again) in 2022 has forced boarding schools to […]
