The escalating conflict in the Middle East has left global markets jittery and supply chains strained, and Ghana’s manufacturing sector is beginning to feel the ripples. While local factories may not see immediate disruptions, the country’s heavy reliance on imported raw materials and components means the cost of production could rise if tensions persist.
Factories in Ghana typically operate on production cycles spanning three to six months. This buffer allows businesses to work through existing inventories before new inputs are required. “During that period, if there are major disruptions, it may not affect you much, because we have bought the goods at a particular price,” explained Seth Twum-Akwaboah, President of the Association of Ghana Industries (AGI).
However, speaking on Joynews, once stocks run out, the impact of higher global prices becomes unavoidable. “When it drags, that is where it comes because no matter the amount of stock you have, it will get finished at some point, then you need to import. When you import, the question will be, will the imports be the same cost as they were before?” he added.
Ghanaian manufacturers rely heavily on inputs from abroad, including machinery, raw materials, and components for light manufacturing and agribusiness processing. Many of these imports originate from Southeast Asia and other regions already affected by the conflict, exposing factories to rising costs.
Shipping and logistics disruptions are compounding the problem. War-related “risk surcharges” are being added to shipping costs, with fees reportedly ranging from $1,500 to $2,000 per container. Delays and longer shipping routes further inflate landed costs, putting additional pressure on local production.
“If this is added to your cost and unplanned, you can imagine the impact,” Twum-Akwaboah said, noting that higher fuel prices and global supply chain challenges will contribute to rising production expenses.
For now, manufacturers remain calm, managing through current inventories and monitoring developments. But the consensus is clear; if Middle East tensions persist, Ghana’s factories may have to shoulder higher input costs, which could eventually translate into more expensive goods for consumers.
