How Ukraine invasion by Russia will impact Ghana’s economy [Article]

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Unlike our fellow Africans on the north of the Sahara whose economy is relatively heavily reliant on oil prices, the conflict in Ukraine might not hit us that hard. But with our current economic woes and our dependence on Russia for some commodities, our situation could worsen.

On Monday, February 21 2022, Russian President, Vladimir Putin, recognized as independent the pro-Russian Ukrainian breakaway regions of Luhansk and Donetsk.

Hours later, Putin announced that he will send Russian military into Donetsk People’s Republic and Luhansk People’s Republic. This, according to him, is to protect the lives of the people in the war-torn Donbass region.

This flared up the already hostile rhetoric against Russia in the western media.

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United States Secretary of State, Antony Blinken, tweeted that “Kremlin recognition of the so-called “Donetsk and Luhansk People’s Republic” as “independent” requires a swift and firm response, and will take appropriate steps in coordination with partners.”

Another senior U.S politician, Jon Cooper, added that “Now that Russia has invaded Ukraine, the U.S and our allies should immediately move to CONFISCATE the financial assets of every Russian Oligarch who is tied to Putin – their bank accounts, their mansions, their yachts. Hit them where it hurts.”

What you will not hear in the mainstream western media is that this is not an invasion.

It’s not an invasion because Donetsk and Luhansk aren’t part of Ukraine anymore. And the Donetsk and Luhansk people want Russia’s help – which is their prerogative. As a matter of fact, the people in the Donbass region voted for Russia to support their breaking away from Ukraine. Half of the population in that region, 700,00 people, have Russian passports.

According to the United Nations, all people are entitled to self-determination, but declaring independence doesn’t oblige other states to recognize it. Russia has recognized it. So, Russia isn’t invading any part of Ukraine. Russia is helping the Donetsk and Luhansk people.

In 2014, when there was war in the two regions that have broken away from Ukraine, veteran investigative journalist, John Pilger, wrote an opinion in the Guardian and asked the citizens of the west: “why do we tolerate the threat of another world war in our name? Why do we allow lies that justify this risk?”

He continued that, “The scale of our indoctrination, wrote Harold Pinter, is a ‘brilliant, even witty, highly successful act of hypnosis’, as if the truth ‘never happened even while it was happening.’

What is happening right now has always been the plan of the US and its allies.

Because “NATO’s military encirclement has accelerated, along with US-orchestrated attacks on ethnic Russians in Ukraine. If Putin can be provoked into coming to their aid, his pre-ordained ‘pariah’ role will justify a NATO-run guerrilla war that is likely to spill into Russia itself,” wrote Pilger in 2014.

“With eastern Europe and the Balkans now military outposts of NATO, the last ‘buffer state’ bordering Russia – Ukraine – is being torn apart by fascist forces unleashed by the US and the EU,” he added.

Again, what you will not hear in the western media is that a third of Ukraine’s population speak Russian and are bilingual. These people “have long sought a democratic federation that reflects the country’s ethnic diversity and is both autonomous of Kiev and independent of Moscow.”

Speaking about this issue last month before Russian military entered the Donbass region, John Pilger, the 82-year-old who has been practicing journalism since 1963 in Britain mostly, pointed out that this is “One of the most distorted stories I can remember. First of all, if you look at the Russians who are said to be the aggressors and about to invade; Russian troops are in Russia. US missiles surround Russia. British troops are on the borders of Russia. NATO Troops surround Russia from Slovenia all the way down.”

As the west has managed to get Putin to enter the Donbass region and are inaccurately reporting it as an invasion of Ukraine, the US and its allies are riding on this to attack Russia.

But according to a Former Moscow Bureau Chief for the Daily Telegraph, Ben Aris, who is the editor in chief of the bne IntelliNews, “what I see is he’s {Putin} prepared for this.

“He started this in 2007 in Munich when he warned that Russia will push back if NATO continue to expand and it did. So, he started mordenising the army in 2012. He sacrificed the prosperity Russia has built during the boom years for this effort. And built up $630 billion of reserves, pays off the debt. So, Russia has one of the lowest debts. And made the whole economy sanction proof. And he’s going to go all the way because there is very little leverage; I mean harsher sanctions are coming but I don’t believe they are going to hurt the {Russia’s} economy in any significant way. They will raise cost; they will keep growth low. But he’s prepared to all of that because he is totally focused on solving this security issue.”

Russia calls the $630 billion bulwark, the Sovereign Wealth Fund. In the same period that this Fund was being shored up the inequality in the country started hiking. As such, poor Russians will be shocked to know their country has this amount reserved in anticipating for today.

The recent utterances and actions of Putin make it clear that the wishes of the US and its allies have come true. However, as the possible annihilation of the world beckons, our country’s economic woes, which are already dire, could be worsened as a result of this impending doom.

The obvious and maybe more debilitating effect of this conflict on us is the increase that we will witness in fuel prices – an already problematic issue in our country. This is because, Russia ranks third behind Saudi Arabia and the United States in oil production, at just over 7 thousand barrels of oil per day (mbd). In exports, it ranks second, at about 4 mbd, behind Saudi Arabia with close to 7 mbd. Whatever choice Russia makes will affect global oil prices.

Do you know Ghana does not produce inorganic fertilizers? And do you also know that we import a lot of fertilizers from Russia?

In 2019, we imported 49,648 metric tons of fertilizers from Russia, the highest from the top 8 countries we imported fertilizers from that year. This was worth $36.29 million, according to tradingeconomics.com.

Although there are other countries that can supply us with fertilizers, I’m tempted to assume that the impact of this impending conflict could shoot up prices of the commodity. Moreover, with our cocoa, vegetables, and cereals consuming most of the fertilizers we import, our food security could be in jeopardy if the private companies that import 90 percent of fertilizer products into our country find it difficult to access the commodity because of this conflict.

If you love eating wheat then you should care about what is happening. Wheat is not grown locally in Ghana so all available wheat on the Ghanaian market is imported. We imported $47.33 million worth of wheat and meslin in 2019 and $4.80 million worth of maize in 2018 from Russia.

Although the above constitute most of the significant commodities we import from Russia, there are other commodities such as paper and paperboard, articles of pulp, paper and board.

According to the United Nations COMTRADE database on international trade, Ghana imported from Russia the aforementioned commodities worth US$10.36 Million during 2019.

In case these imports are ceased, companies that rely on these commodities such as newspapers and magazine firms might have to look elsewhere and might have to pay more also.

At the moment, it seems a set of irrevocable events have been set into motion and the world is heading into an abyss. It is also a time for our country, to think about being truly independent if the world survives this.

The author, Kofi Boateng, is a writer and journalist. Follow him on Twitter via @KofiBoateng_J Email: [email protected]

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