China-Taiwan tensions; why Ghanaians should be worried.

The global economy was hit hard by the coronavirus pandemic in 2020, mostly affected were low and middle-income countries who were facing high risk of debt default.

Then came the Russia-Ukraine conflict which took a heavy toll on most countries including Ghana. The Ghanaian economy was affected by a high inflation on goods and services hitting close to 30%, depreciation of the Cedi, and an increase in oil prices.

A possible conflict between China and Taiwan increases day in day out after Nancy Pelosi’s visit and the anger that ensued.
China views Taiwan as a breakaway region, and as such Taiwan should be a part of the Republic’s reunification plan, of which Taiwan is not interested.

During the pandemic, Ghana took rapid actions to respond to the economic crisis that came as a result. Civil society groups, Foreign missions, the World Bank, and others donated to help fight this crisis.

However, with the Russia-Ukraine war, such groups could not lend a hand and the economy kept sinking. Indeed, it is important to note that neither Russia nor Ukraine is a major (top ten) trade partner with Ghana, yet the conflict between these two countries affected Ghana and Africa as whole due to Russia being a major oil producer as well as a wheat exporter.

As Ghanaians, we should be worried about any armed confrontations between china and Taiwan, or any other country for that matter because China is distinctive to Russia economically. China is Ghana’s biggest trade partner(both imports and exports). China’s economic power is deeply connected to almost every sector; energy, trade, commerce, shipping, etc, across the world.

Today, most of the merchandise we see in shops are either imported or manufactured in China. As a country that heavily depends on imports, an encounter involving China will serve as a major blow because it will block the supply lines, cost of living will skyrocket, and inflation will increase as well.

Not to mention the Ghanaian Cedi, which is suffering already against the major currencies including the Chinese Yuan.

Ghana’s economy is projected to grow steadily in the coming years, in-spite of the economic downturn. Despite the growing tension of a possible conflict between China and Taiwan, or a prolonged Russia-Ukraine war, this could possibly result in another economic recession with countries heavily dependent on Chinese trade mostly affected. Rice, cooking oil, and other agricultural products are imported into the country from Vietnam, Thailand, and Malaysia.

A military confrontation will disrupt the flow of goods on the busy seas surrounding China, and this will further result in  crumbling Ghanaian economy.

 

Bainamultimedia/Ibrahim Jabir

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