Global conflicts may raise production costs in Ghana - AGI

The President of the Association of Ghana Industries, Seth Twum Akwaboah, has cautioned that ongoing global conflicts and supply chain disruptions could eventually affect Ghana’s manufacturing sector if the situation persists.

Speaking on PM Express on Wednesday, Twum Akwaboah explained that the impact of global disruptions may not be immediately visible because most manufacturers operate production cycles lasting three to six months.

According to him, companies typically secure raw materials and inputs months before production, meaning short-term disruptions may not quickly translate into higher costs or shortages.

“During that period, if there are major disruptions, it may not affect you much because the goods were bought at a particular price and are being processed at that cost,” he noted.

Despite the current uncertainty, he said manufacturers are not alarmed for now, indicating that businesses remain relatively calm about the situation.

However, he warned that prolonged disruptions could create difficulties once existing stock runs out and companies are forced to import new inputs.

Twum Akwaboah noted that Ghana’s manufacturing industry relies heavily on imported machinery and raw materials, particularly for light manufacturing, with many inputs sourced from regions such as Southeast Asia that are already experiencing disruptions linked to global tensions.

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He said if the situation continues, manufacturers in Ghana will likely face higher production costs as the price of imported inputs rises.

The AGI president added that increased shipping and logistics costs could also contribute to rising expenses, especially as supply chain delays lengthen delivery times.

He further revealed that shipping companies have introduced additional “war risk” charges linked to global conflicts, ranging between $1,500 and $2,000 per container, which could significantly raise import costs for manufacturers.

Twum Akwaboah said the international community must work toward resolving the ongoing tensions quickly to prevent prolonged disruptions to global trade.

For now, he stressed that Ghanaian manufacturers are monitoring developments but remain hopeful that the situation will stabilise before major impacts are felt across the sector.

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