The increasing rise in oil prices globally has the potential to negatively affect economic growth of countries in the next two years and developing nations could be hit the hardest.
Ghana for instance could lose 3% of its growth, according to Britain’s Overseas Development Institute (ODI).
Overall, the ODI which is an economic development group says, there could be a 1% decline in gross domestic product (GDP) of countries and some African countries could see a much bigger decline, possibly 3 to 4%.
Dirk Willem te Velde, ODI’s head of programme says, “The oil price at the moment is about 40% higher than it was on average last year. So an increase in the price of oil by 40% will have quite some implications for the world economy and also developing countries and in particular oil importing countries.”
An overall 1% decline translates into a loss of about $500 billion from the global economy. The overall sub-Saharan economy could lose $8 billion, the group said.
An ODI research indicates that Ghana, Lesotho, Swaziland, Togo, Honduras, Moldova and Nicaragua could lose more than 3% of their GDP to soaring oil prices.
By Emmanuel K. Dogbevi