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Global supply chain disruptions: Implications for food security in Ghana

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“There is no fundamental exercise better for the heart than reaching down and lifting people up the essence of our existence”. This is a heartfelt appreciation of the millions of people reaching out to the Ukrainian refugees and showing them that the creator still lives and will meet them at the point of their needs either in death or alive.

The major supply chain disruption that results from this turmoil has the potential to spark something far more significant than the Cold War, with an Iron Curtain isolating the West from Russia.

Global supply lines established by Western firms after the fall of the Berlin Wall more than three decades ago could be severely disrupted.

In this way, the COVID-19 pandemic exacerbated the already-disordered state of supply chains, which are frequently large networks of resources, money, information, and people that businesses rely on to distribute goods or services to consumers, resulting in major shortages, disruptions, and price inflation.

In addition, the aggravation of this, as well as the consequent sanctions against Russia, will put more strain on them, with resultant consequences including increasing energy prices and worries of famine.

In every argument on the world stage, this famine is well-represented, and developing economies are well-versed in it.

Fuel and rising food costs are the most prominent immediate consequences. Russia produces almost 40 % of Europe’s natural gas and 65 % of Germany’s natural gas, according to the International Energy Agency (IEA).

Russia is the world’s third-largest oil exporter and accounts for 7 % of all crude oil and petroleum product imports into the United States, according to the International Energy Agency. It is worth noting that Russia is regarded as the world’s leading exporter of wheat.

They together with Ukraine account for around 29 percent of the worldwide wheat export market. In addition, Ukraine surpassed the United States as the world’s leading supplier of corn, barley, and rye by 2021 (CNBC Report, 2022). Due to the turmoil, all of these activities have come to a standstill. So, food inflation is on the horizon, with the impact being felt most acutely in developing countries.

Furthermore, the unrest may continue to put pressure on metal markets. Russia has around 10 % of the world’s copper reserves and is also a major producer of nickel and platinum. Nickel has been trading at an 11-year high, and any disruption in supply caused by the war is likely to result in further price hikes for aluminum (interos.com).

According to the Financial Times (FT), Ukraine account for 25 percent of global neon supply in 2022, while Russia plays a big role in major EU imports as well as a supplier to the EU market.

Consequently, the EU imports 9 percent of primary aluminum, 42 percent of semi-finished steel, 42 percent of palladium supply (85 percent of palladium produced is used for automotive catalysts), 12 percent of platinum supply (39 percent of platinum produced is used for automotive catalysts), 9 percent of rhodium supply (91 percent of rhodium produced is used for automotive catalysts), and 11.2 percent of the world’s nickel production, which is used in vehicle batteries.

Russian sanctions ad spillover effects on world commerce, with the most vulnerable economies in Africa bearing the brunt of the impact.

Crude oil prices soared to $115 per barrel after members of the International Energy Agency decided to release 60 million barrels of oil from emergency stocks, according to Bloomberg. This volatility was sparked by the sanctioning of Russia, which is a significant energy producer and exporter, as well as the retaliatory closure of major supply routes (Fig 1).

Global supply chain disruptions: Implications for food security in Ghana
Fig 1. Crude oil price fluctuations from 2008-2022. Data sourced from Bloomberg

Implications for Food Security in Developing Countries
The world has reached a point where economies are increasingly inward-looking, with the primary focus on their local economies and welfare issues before turning their attention to the developing world. This was most noticeable and dramatic during the COVID-19 vaccine procurement and rationing, where affluent economies procured millions of doses at the cost of weaker or poorer economies. Sub-Saharan Africa was on the receiving end of the pandemic, and the lack of vaccines had a significant impact on their coping strategies.

The fundamental point is that developing economies, particularly in sub-Saharan Africa, must innovate in order for them to be competitive. This includes sourcing sufficient alternatives to wheat, increasing local content in the areas of technology, and developing sustainable industrial platforms as an ecosystem where the youth can practice finding solutions to our problems.

The governments should deliberately establish agricultural policies that allow citizens to eat-what-they-grow, as part of a purposeful policy. Local food production using organic fertilisers, technological advancements, and substantial capital investment in renewable energy sources such as solar and biogas must be given top priority. These will lessen our reliance on foreign goods and position us as net exporters.

In order to transform important agricultural exports such as cocoa, rubber, coffee, and lumber into semi-finished or finished industrial goods, there needs to be wider stakeholder participation involving all African technocrats and governments (Fig 2-3). When it comes to increasing the value of our exports while also offering sufficient work possibilities for the teeming youth, this will be a game-changer.

Global supply chain disruptions: Implications for food security in Ghana
Fig 2. Year-on-year food price fluctuation from 2011 to 2021. Source: Bureau of Labour Statistics.

Food inflation in Ghana has been on the rise in recent months. Thus, price volatility, along with a weakening cedi and the effects of fuel price increases, are the main drivers exposing the Ghanaian economy’s hard times.

Furthermore, supply constraints from big producers and importers alike cast a bleak picture of Ghana’s economy, with serious consequences for food security and sustainable value chains. The poor and marginalised in urban suburbs and rural poor will be the hardest hurt.

As a result, urgent fiscal adjustments and pragmatic actions to ensure cedi stability, consistent and steady inflation trends, and fuel price stability are required.

Global supply chain disruptions: Implications for food security in Ghana
Fig 3. The average consumer price of major commodities in Ghana., March 2022. Data source: SRID-MoFA
Global supply chain disruptions: Implications for food security in Ghana
Fig 4. Retail prices of food commodities per kg in major markets in Ghana., March 2022. Data source: SRID-MoFA
Global supply chain disruptions: Implications for food security in Ghana
Fig 5. Average market prices of selected food commodities per kg in major markets., March 2022. Data source: SRID-MoFA

In order to develop a national mindset about home-grown solutions and an attitude of working to develop our economies, citizens across developing economies should be conscientious, and institutions should be strengthened to inculcate a development mindset in citizens, particularly among youth, who are the future leaders of our countries. Everything that a people may accomplish requires purposeful efforts, work ethics that are anchored in change, and structures based on consensus and collaborative involvement.

Global supply chain disruptions: Implications for food security in Ghana
Fig 6. Russia and Ukraine Commodity Exports. Source: Comtrade and World Bank, 2022.



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Restore benchmark value, extend tax amnesty – Dr. Ayim-Darke to government

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The President of the Association of Ghana Indsutries, Dr. Humphrey Ayim-Darke, has suggested some four measures the government could employ to reduce the financial constraint on business as they battle the current economic downturn.

According to him, businesses are suffering and it is up to the government to take drastic measures to see to it that businesses survive this phase in Ghana’s economic history.

Speaking on JoyNews’ PM Express Business Edition, he among other things called for the restoration of the benchmark value as well as an extension of the tax amnesty which is supposed to end in June of this year.

He said, “One, restore the benchmark value as we requested … a number of issues have led to this.  

“Two, the raw material bit that industry is using let us discount it zero for industries to import and increase productivity. Granted that this inflation is being driven by productivity we’ll not find ourselves in this space.

“Thirdly, I said peg the exchange rate at the port, instead of every two weeks possibly start with a quarter and let’s see the effect.

“Fourthly, the tax amnesty that government granted industry and the economy kindly extend it, you know it was extended to June, we pray that within the difficulty we are battling with our taxes, Mr. Minister please extend the tax amnesty possibly for a year so that we can get a breather to readjust and plow in some of the funds back into the system.”

He believes these measures if implemented would allow businesses thrive and bounce back better in the near future.



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Court grants out of court settlement for Newmont

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A Sunyani High Court presided over by Justice Douglas Seidu has granted an out of court settlement to the chiefs and people of some five Ahafo North communities after members took Newmont Ghana Gold Limited (NGGL) to court for allegedly failing to comply with regulatory requirements in compensation processes and rejecting the preferred expert of the communities.

Disgruntled farmers in the Tano North District of the Ahafo Region who filed the application on 29th April, 2022 were seeking an order of interim injunction restraining the defendant (Newmont) from undertaking compensation valuations relative to the lands at Afrisipa and Yamfo in the Ahafo Region.

The court granted the out-of-court settlement request after hearing a plea from the paramount chief of the Yamfo traditional area, Nana Ansah Adu Baah II, on behalf of the other chiefs. The chiefs were given until June 3 to settle the case amicably and report back.

Court grants out of court settlement for Newmont

Nana Adu Baah II, who was also in court, told JoyNews that a meeting between the two parties will be set up quickly in order to settle the dispute peacefully.

He noted “We will arrange a meeting between Newmont and members of the five communities for them to voice out what worries them, in court if somebody is representing you, he may say something which even you don’t like it, so they will get the chance to voice out their worries for Newmont to respond, I want to tell them to take it cool and wait for the outcome.”

He advised citizens to be calm while the committee deliberates, saying that the conclusion would be communicated to all parties via their lawyers.
Many of the farmers’ farm fields and properties have been destroyed, according to the farmers, yet the firm seemed unconcerned about their condition…

The irate farmers, who numbered more than 200 and were wearing in red headgears and armbands, claimed that a substantial number of their members had been bullied and mistreated on their farms by officers of the NGGL and the EPA and had yet to get compensation.

The farmers are members of the Ahafo North Property Owners and Farmers Association, which is made up of local farmers from the five Newmont North Ahafo mine-take settlements of Yamfo, Susuanso, Afrisipakrom, Techire, and Adrobaa.

Court grants out of court settlement for Newmont

Ali Baba Mohammed, the farmers’ leader, said that taking the issue out of court is not a concern for them, but that the proper thing should be done.

He claims that since taking over, NGGL has damaged a number of farm areas without following the proper procedures or paying adequate compensation, which they find alarming.

“What made us to bring the case to court is that Newmont did not declare moratorium but yet still they’re telling us that there’s a moratorium, so nobody should continue any work and we have not been paid, in terms of negotiation everything is not just fair to us,” he said.

Court grants out of court settlement for Newmont

Mr. Mohammed stated that if actions to compensate them are not implemented, they will continue to put pressure on the mining firm until it does the right thing.

“Newmont is coming to work with the farmers and community members, therefore they should be careful not to do anything bad to the community, else they will never get their peace to work in our various communities,” he indicated.

Attempts to contact Newmont Ghana Gold Limited have been futile.



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We are committed to investing more in Ghana – MTN Group CEO

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MTN has given the firm assurance of investing more in Ghana despite the current economic environment. Speaking at a media engagement in Accra, visiting Group Chief Executive of MTN, Ralph Mupita noted that they have taken this decision because of the role of Ghana in the group and returns on its investments.

He added that “we want to have a sustained investment program so that in a market like Ghana, every Ghanaian has the capacity to enjoy the benefits of modern connected life and we are not changing view.”

“So if we are true to that vision, then we must sustain the CAPEX and therefore we are not going to review that commitment when it comes to investment in Ghana,” he explained.

We are committed to investing more in Ghana - MTN Group CEO
Group Chief Executive of MTN, Ralph Mupita

There are fears that due to the current challenges facing the economy which have resulted in inflation hitting a record 23.6 percent in April and increasing taxes on the company’s operations, MTN might have reviewed its Capital Expenditure.    

But the Group Chief Executive of MTN, noted that it is committed to aligning itself to programme like the Ghana Cares initiative by the government of Ghana.

MTN and the E-Levy

On the tax on Electronic Transfers popularly known as E-Levy, the Group Chief Executive noted that, for now, MTN sees it as burden-sharing with Government in terms of addressing the current challenges facing the economy.

Some were also looking forward to seeing whether the introduction of the tax has affected MTN.

Mr Mupita, however, noted that it will only be able to give accurate data on these matters in six months’ time.

Localization of MTN 

The Group Chief Executive of MTN noted that they are committed to increasing the stake that Ghanaians can hold when it comes to the issued shares of MTN Ghana.

MTN, in 2018, started with about 12.5 percent of the issued shares to the public

“It currently stands at around 23.7 percent and we are looking at about 30 percent and we have made a lot of progress on that, 30 is the target and that is the commitment as Group.”

The Group CEO added that as a company “we want more and more Ghanaians to enjoy and participate in the economic success of Ghanaians and the business.”



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