A comparative analysis of the performances of macroeconomic indicators during the Global Financial Crisis, COVID-19 Pandemic, and the Russia-Ukraine War: The Ghanaian case

Tetteh, Bright; Ntsiful, Enoch Article A comparative analysis of the performances of macroeconomic indicators during the Global Financial Crisis, COVID-19 Pandemic, and the Russia-Ukraine War: The Ghanaian case Research in Globalization Provided in Cooperation with: Elsevier Suggested Citation: Tetteh, Bright; Ntsiful, Enoch (2023) : A comparative analysis of the performances of macroeconomic indicators during the Global Financial Crisis, COVID-19 Pandemic, and the Russia-Ukraine War: The Ghanaian case, Research in Globalization, ISSN 2590-051X, Elsevier, Amsterdam, Vol. 7, pp. 1-12, https://doi.org/10.1016/j.resglo.2023.100174 This Version is available at: https://hdl.handle.net/10419/331098 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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A comparative analysis of the performances of macroeconomic indicators during the Global Financial Crisis, COVID-19 Pandemic, and the Russia-Ukraine War: The Ghanaian case Bright Tetteh a , b , c , Enoch Ntsiful d , e , f , * a Department of Economics, Management and Quantitative Methods, University of Milan, Italy b Department of Economics and Management, University of Pavia, Italy c School of Economics, University of Cape Town, Rondebosch, South Africa d Department of Economics, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana e Departmento de Fundamentos del An´ alisis Econ´ omico, Universidad d’Alacant, Spain f School of Economics, Universitat de Barcelona, Barcelona, Spain ARTICLE INFO Keywords: Global financial crisis COVID-19 Pandemic Russia-Ukraine war Macroeconomic performance Ghana ABSTRACT The recent downturn of the Ghanaian economy has been numerously attributed by the government and policymakers to past global shocks. By using a descriptive approach, this study aimed to examine the performances of macroeconomic indicators of the Ghanaian economy during the three most recent and impactful global shocks – the Global Financial Crisis (GFC), the COVID-19 pandemic, and the Russia-Ukraine war. Through comparative analysis, the study shows under which shock an indicator was trending downwards, upwards, or stable – on average. The study found that relative to the other shocks, cocoa and gold prices increased most under the GFC, and therefore, their exports were also averagely more favourable under the GFC, but timber exports and oil and gas imports were trending downwards. Exports of timber and timber products and imports of oil and gas increased under the COVID-19 shock but gold export and trade balance declined, on average, during the COVID19 shock. Exchange rate, oil and gas prices, and food and non-food inflation were found to have been unprecedently high during the Russian-Ukraine war compared with all other shocks, and this reflects the worst record of economic growth during the Russian-Ukraine war compared with all other shocks. Appropriate recommendations are made for policymakers to enhance domestic food and non-food production to curb inflation and add value to commodity exports to improve economic growth and trade balance. Introduction In the last two decades, the global economy has suffered from three main distinct shocks that have affected global economic activities. The first is the Global Financial Crisis (GFC) which began in late 2007 in the United States of America (USA) and is the severest socio-politicoeconomic phenomenon since the 1950s. According to Dominguez et al. (2012), financial flows declined dramatically during the GFC, for example, domestic and overseas financing for emerging markets dried out by mid-2008 and many export-dependent countries experienced a sharp GDP contraction. The second shock is the novel CoronaVirus (COVID-19) pandemic that began in December 2019 in China. It is deemed as one of the most chaotic socio-health-economic shocks since the likes of the Black Death (1347–1351), HIV/AIDS (1980s), and the Spanish Flu (1918–1919), which killed about 50 million humans globally (Shultz et al., 2022). COVID-19 directly affected both the health of humans and economic activities. There were over 233 million confirmed cases, about 4.7 million deaths, and more than 6.1 billion vaccinations worldwide (Shultz et al., 2022). Although its monetary impacts vary across countries, its current and future economic cost is estimated to be over USD10 trillion. The main transmission channels of the pandemic on the global economy are the restrictions on international mobility, disruption of the global value chain and reduction in cross-country financial flows, leading to a contraction in GDP per capita of more than 90 % of economies worldwide (Yeyati & Filippini, 2021). The latest global shock is the Russia-Ukraine war which has been the driving force of inflationary pressures in many developed countries and slowed down economic recovery from the COVID-19 pandemic, especially in the labor * Corresponding author. E-mail address: [email protected] (E. Ntsiful). Contents lists available at ScienceDirect Research in Globalization journal homepage: www.sciencedirect.com/journal/research-in-globalization https://doi.org/10.1016/j.resglo.2023.100174 Received 24 August 2023; Received in revised form 4 November 2023; Accepted 11 November 2023 Research in Globalization 7 (2023) 100174 2 market (Prohorovs, 2022). Though the GFC began in late 2007 in the USA, Ghana’s Finance Minister acknowledged in the 2009 budget statement that Ghana experienced the effect of the GFC from early 2008 with the severest impact occurring in mid-2008. Domestic inflation increased from 16.5 % in 2008 to 19.3 % in 2009 with GDP per capita growth declining from 6.6 % in 2008 to 2.2 % by the end of 2009, causing a recession (World Bank, 2021). Unlike COVID-19 which restricted the movement of goods and services, the GFC did not. Consequently, international trade increased from 70 % in 2008 to 72 % in 2009 and total export earnings rose by 26.6 % between 2007 and 2008 (World Bank, 2021). Shultz et al. (2022) argue that Ghana is one of Africa’s strongest and most stable economies, however, her macroeconomic performance during the COVID-19 exposed her vulnerabilities to shocks, just like other developing economies. Ghana’s first COVID-19 case was recorded on 12th March 2020 (left panel of Fig. 1) and as of May 2020, the total cases recorded were 2074. Total deaths increased from 301 in September 2020 to 1306 by the end of December 2021. Similarly, it is observed from the right panel of Fig. 1 that the number of new cases continued to rise from 112 in April 2020 to 853 by June 2020. As a result of the lockdown and restrictions, over 404,200 workers lost their jobs between April and July 2020 (Aduhene & Osei-Assibey, 2021). This worsened inequality, as about 75 % of the affected jobs were small traders, daily workers, and wage labourers. In addition, some salaried workers lost about 50 % of their monthly income. According to the World Bank, Ghana’s trade (% GDP) dropped from 77 % in 2019 to 39 % in 2020, foreign direct investment (FDI) declined from 5.7 % to 2.7 %, and GDP growth contracted from 6.5 % in 2019 to 0.5 % by the end of 2020 (World Bank, 2021). Due to the lockdown and the restriction on local mobility, the average price of agricultural produce increased to about 20 % by the end of 2019 (Aduhene & Osei-Assibey, 2021). As the Ghanaian economy was resurrecting from the pandemic, the emergence of the Russia-Ukraine war impeded its economic recovery progress. Ghana imports about 60 % of its iron ore from Ukraine, hence the war has disrupted the building and construction industry as imports fell drastically (Mhlanga & Ndhlovu, 2023). Duho et al. (2022) highlighted that the rise in commodity and fertilizer prices is because the war cascades into food prices, especially those made from cereal, resulting in uncontrollable inflation in subsequent periods. Data from the World Bank shows that inflation tripled from 10 % in 2021 to 31.3 % in 2022 (World Bank, 2021). Cocoa ranks among the top commodities exported to Russia and Ukraine. In 2020, cocoa and cocoa preparations exported to Russia and Ukraine were valued at USD 72.5 million and USD 32.5 million, respectively (Duho et al., 2022). Thus, since the war, demand for cocoa could decline with consequential effects on the income gains for the country. The combined effects of input and energy prices would make it difficult to reduce the inflationary pressures in Ghana. Many researchers have investigated the impact of GFC, COVID-19 or the Russia-Ukraine war on various macroeconomic variables in developing countries (Mhlanga & Ndhlovu, 2023; Aduhene & Osei-Assibey, 2021; Anyanwu & Salami, 2021; Aryeetey & Ackah, 2011; BrambilaMacias & Massa, 2010). However, none of these studies has conducted a comparative analysis of all the shocks in a single study. Performing a comparative analysis between these three unique crises in Ghana is crucial because each of these crises exposes which sector of the economy is most vulnerable to each distinct shock – being it financial, health, or war. Studying these vulnerabilities helps governments, institutions, and businesses to address structural weaknesses to insulate the economy against similar future shocks. Also, the comparison would serve as a strong foundation to analyze possible causal effects which could inform policymakers about which policies to initiate or enforce to combat the adverse effects of these shocks. This could help shape future crisis management strategies and refine policy recommendations. Furthermore, studies on Ghana on individual crises considered a limited Fig. 1. Ghana’s COVID-19 cases and related death rates Source: Authors’ construct with data from Our World in Data (2023). B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 3 number of macroeconomic variables such as GDP (Amewu et al., 2020), inflation, stress and fear, and employment (Aduhene & Osei-Assibey, 2021) without considering important variables such as exports of cocoa, gold, and timber, oil and non-oil imports, trade balance and nonfood inflation This limits the arguments on the performances of macroeconomic variables under these novel shocks in Ghana. These variables are important because most of them are the backbone of the Ghanaian economy. It is therefore important to conduct further research that provides a descriptive comparison of the macroeconomic position of Ghana under these novel shocks in a single study. In light of the above, this study aims to investigate the performance of several macroeconomic indicators under each shock. As a descriptive exercise, we compare the average performance of each indicator throughout each shock as well as compare the trend of each indicator at the beginning of the shock with the trend at the end of the shock. This helps us capture the short and long-run trends in the average performance of each indicator under each shock. This study contributes to literature in many ways: First, it provides coherent insights into the severity of each shock and the variables that were most affected simultaneously. Second, the shortand long-run comparison also implicitly informs how effective the policies implemented by the government at the emergence of the shock might have been before the end of the shock. Third, unlike other studies that considered a limited number of macroeconomic variables, this current study expands the variables to provide a comprehensive understanding of these shocks on macroeconomic factors of the Ghanaian economy using tables and figures to easily appreciate the trend and performance of these variables over time under each crisis. Lastly, it is important to mention that this study is the maiden work that has compared the dynamics of macroeconomic indicators in Ghana under each shock in a single study. In doing so, this study provides insight into the following question: “What was the performance and trend of various macroeconomic indicators of Ghana under the last three global shocks?”. The rest of the study is organized as follows. Section 2 presents the theoretical and empirical reviews of the subject matter. Section 3 presents the data and methodology while section 4 outlines the dynamics and impacts of the shocks across each macroeconomic variable. Lastly, section 5 presents the conclusion and policy recommendations based on the observations from the study. Literature review This section is devoted to the review of empirical and theoretical literature on the impact of GFC, COVID-19 and the Russia-Ukraine war on various macroeconomic indicators. The first section focuses on the theoretical literature review and the second section outlines the empirical literature on the three shocks in developing countries, including Ghana. Theoretical literature review The impact of recession on macroeconomic variables was outlined in the New Keynesian model. This model suggests that the fundamental cause of recession is a fall in aggregate demand because of a decline in private investment, causing firms to produce below their capacity (Harvey, 2002). This implies that any shock that influences aggregate demand may impact the economy. The GFC, the COVID-19, and the Russia-Ukraine war directly impacted aggregate demand. For instance, the GFC reduces capital flow, especially from developed to developing countries (Dominguez et al., 2012), affecting investment and production. Also, COVID-19 affected consumer behavior and the demand for goods and services as many lost their jobs (Aduhene & Osei-Assibey, 2021, Bukari et al., 2021). This, coupled with the global restrictions, led to a drop in production as household aggregate demand dipped significantly. The neoclassical growth model considered labor and capital as essential production inputs. The central theme of the model is that sustained economic growth is driven by capital accumulation, technological progress, and efficient resource allocation (King & Rebelo, 1989). The COVID-19 pandemic restricted the flow of capital goods and labor which are the most important ingredients of the neoclassical growth model as it influences economic growth. Hence, economic growth in many countries, including advanced countries such as the USA, significantly declined (Li et al., 2022). Koopman and Sz´ ekely (2009) mentioned that the immediate impact of the GFC is its impact on investment and slower capital accumulation, which reduced investment and affected many other macroeconomic variables such as GDP, inflation, and trade balance. The ongoing Russia-Ukraine war has already affected commodity prices such as wheat, fertilizer and oil since Russia is among the world’s largest oil suppliers (Duho et al., 2022). From the demand side, the high food and input prices would result in higher inflationary pressure and a surge in interest rates and consequently retard business growth and expansion. From the supply side, the increase in energy prices due to the war would increase production costs and restrain domestic and overseas investment. Since crude oil is viewed as an essential input in the economy’s production in the neoclassical growth model (Ben et al., 2016), the high oil price would increase production costs, leading to a decline in firms’ profits. Conceptual framework Fig. 2 is a simplified pictorial depiction of the macroeconomic variables under consideration in this study. The current study hypothesized that each shocki (where i =GFC, COVID-19, Russia-Ukraine) has had unique direct implications on these indicators and could affect the dynamics of these variables. However, the intensity of the disturbance in a macroeconomic indicator varies based on the type of shock. For instance, the COVID-19 shock led to an instant pause of firm activities and, a ban on goods and human mobility to and from Ghana as well as most trade partners of Ghana. As a result of high demand over supply, domestic food and non-food inflation began to increase leading to a rise Fig. 2. Conceptual framework for the macroeconomic variables Source: Authors’ construction. B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 4 in overall inflation. Regarding trade balance, for example, the conflict has disrupted exports of key commodities like oil, natural gas, wheat, and fertilizers from Russia and Ukraine. Countries that rely heavily on imports of these commodities like Ghana are likely to experience higher import bills, worsening their trade balance. COVID-19 created uncertainty, reducing global demand for currencies of severely impacted countries. Currencies of commodity exporters also declined as prices fell initially. The Russia-Ukraine conflict has strengthened the US dollar as a reserve currency, appreciating the dollar against other major currencies. Any country heavily reliant on Russian or Ukrainian trade could see currencies depreciate. Empirical review Global financial crises and macroeconomic performance in developing countries Despite the impact and extent of the GFC, the literature on developing countries, especially those in Africa and Ghana is limited. Ajakaiye et al. (2009) examined the impact of the crisis on social sectors in Ghana and Nigeria. Their analysis indicates that while exports in Nigeria fell significantly, that of Ghana rose by 22 %. In a related study, Nkama (2009) examined the impact of the GFC in Cameroon and showed that the crisis diminished export revenue, increased inflation, and interrupted jobs in many sectors. Using descriptive analysis, Gockel (2010) investigated the economic impacts of the GFC across various sectors in Ghana. The outcome showed that the economy performed relatively well in terms of commodity exports as cocoa exports increased by 67 % and earnings from gold export increased by 29.6 %. In addition, the average price of timber increased by 17.64 %, which triggered its exports from USD 249.0 million in 2007 to USD 309.0 million in 2008. As a result of the export earnings, GDP was relatively stable at the time of the crisis but the country’s financial sector and its ability to borrow weakened while remittances inflow rose from USD 1.3 billion to USD 8.3 billion in 2008. Conversely, Antwi-Asare et al. (2010) reported that the crises reduced remittances, foreign aid, foreign direct investment (FDI) and reduction in wages, especially in the informal labor market. Furthermore, the simulations from the general equilibrium model disclosed that economic development slowed down by 3.8 %. In Africa, Aryeetey and Ackah (2011) analyzed the impacts and transmissions of the GFC on African economies. The authors reported that the crisis reduced the aggregate output on the continent and that trade and remittance inflows were largely affected. Similarly, Allen and Giovannetti (2011) considered the transmission channels of the GFC to African countries and recorded that trade was the main route of the impact of the crisis on African nations, although foreign aid inflows were affected. Kenawy and el Ghany (2012) explored the socio-economic effects of the GFC on employment and the productivity of other sectors such as banking, tourism, oil, air transport and the chemical industry in Egypt. On average, their analysis indicates that the GFC negatively affected employment and productivity in other sectors. Dominguez (2012) and Dominguez et al. (2012) examined the impact of the GFC on foreign reserve management and decisions using cross-country data for developed and developing countries to assess the role of reserves in managing crises. The result of the study shows that the average reserves for many countries were stable, however, most emerging economies depleted their reserves during the crises which affected their local currencies negatively. Rena and Msoni (2014) examined the GFC and its economic impact on South Africa and reported that the economy went into recession in 2008/09 due to the crises. The authors further reported that about a million jobs were lost and the unemployment rate was above 25 %. COVID-19 and macroeconomic performance Beyond the human tragedy of the COVID-19 pandemic, it had a devastating economic impact that has drawn the attention of many researchers to analyze the implications on macroeconomic indicators. Using qualitative and quantitative interviews, Babuna et al. (2020) revealed that the pandemic led to a loss of Ghs117 million in the insurance industry in Ghana. In a related study, Afriyie et al. (2020) examined the challenges, experiences, and opportunities of the pandemic in relation to its fatalities and healthcare. They revealed that the lockdown and track and trace systems helped minimize the spread of the virus, hence, only 85 deaths were reported by June 2020. Ataguba (2020) revealed that in countries such as Nigeria, the falling oil prices led to the devaluation of local currency. Also, the high commodity prices and decline in production engineered inflationary pressures in many African countries. Amewu et al. (2020) utilized the social accounting multiplier matrix (SAMM) to probe the economic cost of the COVID-19 pandemic in Ghana. The results from the SAMM analysis showed that GDP fell by 27.9 % and an additional 3.8 million Ghanaians became poor. Concerning the socio-economic implication of the pandemic in the Ghanaian marketplaces, Asante and Mills (2020) found that there were increases in general prices of basic goods due to the lockdown and strains on production. Ozili (2020) also investigated the socio-economic impact, policy response and opportunities of the COVID-19 pandemic in Africa. The result revealed that the COVID-19 crisis led to a reduction in stock market prices which restricted financial flows into many African countries. In addition, oil prices reduced significantly, which affected oil-exporting countries such as Nigeria and Angola. In Ghana, Aduhene and Osei-Assibey (2021) explored the socio-economic impact of COVID19 on the Ghanaian economy using descriptive analysis. The finding from their study indicates that about 42,000 people lost their jobs in the first two months of the outbreak and the tourism sector lost USD171 million. In continental space, Anyanwu and Salami (2021) investigated the impact of the COVID-19 pandemic on African countries, including Ghana. The authors showed that the pandemic has affected many African countries which reflected in the decline in GDP growth, loss of jobs, and increase in general prices of goods and services across the continent. Shultz (2022) revealed that although the pandemic was threatening, Ghana employed measures to reduce its impact. For instance, in early April, the country provided free public water, 50 % reduction in electricity bills, and 50 % increase in the salaries of health workers. Russia-Ukraine war and macroeconomic performance Country-specific empirical analysis of the war on Ghana is scanty. Most research is on developing countries, including Ghana. For instance, Maijama’ and Musa (2022) performed an empirical investigation on the impact of the war on crude oil prices and how Nigeria as an exporter of crude oil can utilize this opportunity of surge in crude oil prices in the international energy market by increasing its production capacity the authors noted that crude oil prices has increased since the emergence of the war and that Nigeria should take advantage of the oil prices and increase its oil export to generate revenue for development. At the regional level, Duho et al. (2022) investigated the impact of the RussiaUkraine war on African countries. The outcome showed that in West Africa, Ghana and Nigeria have benefited from the high oil prices. However, the benefits have been eroded by the high commodity prices. Specifically, in Ghana, the increase in cereal and fertilizer prices has cascaded into inflation as experienced from March to December 2022. Similar dynamics were observed for countries such as Cˆ ote d’Ivoire and South Africa according to the authors. This result is in tandem with Ali et al. (2022), who reported that oil-exporting countries may gain from price hikes. However, food and oil importers like Morocco may suffer from the increase in prices. Mhlanga and Ndhlovu (2023) examined the implications of the Russia–Ukraine war on Sustainable Development Goals (SDGs) in Africa using accounts from academic literature and grey literature analysis. Their investigation showed that the continent is experiencing high food prices, energy shortages, and commodity price hikes due to disruptions in the supply chain of vital inputs such as fertilizer and oil. Additionally, the war has disrupted the construction industry, especially in Ghana, as B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 5 the supply of iron ores has reduced. Arndt et al. (2022) investigated the impact of the war on food, fertilizer and fuel prices on global pervert and food security, especially in developing countries using countrywide economy models. It was revealed from their study that in the short term, the crises affected agrifood systems, poverty, and food insecurity in 19 countries, pushing 22.3 and 27.9 million people into the hunger and poverty zones, respectively. Similarly, Arndt et al. (2023) reported that the Russia-Ukraine war has increased palm oil prices by 68 %, and wheat prices by 113 %. Also, their results showed that real crude oil rose by 34 %, natural gas (88 %) and fertilizer prices doubled (101 %). These price hikes have impacted inflation in many developing countries. In summary, the empirical evidence reviewed herein presents an interesting dynamic of the GFC, the COVID-19 pandemic and the RussiaUkraine war on Ghana and other developing countries. Regarding the war, the main variables affected were oil and commodity prices. The effect is inflationary pressures in developing countries including Ghana. COVID-19, on the other hand, directly disrupted exports and imports of goods and services, employment, consumption, and production. Furthermore, the empirical literature showed that the GFC had exchange rate implications and disrupted financial flows for investment. The most important observation was that none of the literature has comprehensively performed a comparative analysis of the dynamics of macroeconomic variables under these three most impactful shocks in the last two decades in a single study. This gap in the literature on developing countries, especially Ghana, reinforces the significance of this study. Methodology and data description This section presents the methodology used for the analysis as well as the description of the variables under study. Methodology The primary aim of this study is to examine the performance of macroeconomic indicators of Ghana under the most impactful recent global shocks. By doing so, we compare the weighted average changes in various macroeconomic indicators throughout each shock and discuss under which shock an indicator had the severest, mildest, or favourable average performance. To disentangle the shortand long-term trends, we refer to the last quarter of each shock as the long-run to compare the performance of each indicator from the time of the incidence of the shock with the endline of the shock. To achieve the objectives of the study, we employed descriptive and graphical approaches following Li et al. (2022) and Aryeetey and Ackah (2011). As the focus of the current study is to consider the performances of macroeconomic indicators under each shock and not to capture the impacts of the shocks as causal, this descriptive approach is regarded as appropriate. The weighted averages of each indicator under each shock are presented in tables while the trends are shown in figures. This method is easy to comprehend since it does not require any prior knowledge of econometrics or statistics, hence, it is suitable for both academic and non-academicians. The method allows researchers and policymakers to quickly grasp the key trends and patterns in macroeconomic indicators without the need to analyze raw data in detail. This visual clarity can facilitate rapid decision-making post crises. Moreover, the trends shown in graphics help appreciate the possible correlation and behaviour of the indicators during the shocks. Data description and measurement The study used monthly data spanning 2008 M1 to 2023 M4. The data was then divided based on the three shocks. The study focused on 2008 M1 to 2009 M12 for the GFC following the arguments of Dominguez et al. (2012) and Gockel (2010), the period from 2020 M3 to 2022 M1 is used for the COVID-19 analysis, and 2022 M2 to 2023 M4 for the Russia-Ukraine war due to data availability. It is acknowledged that each of these shocks could have an aftermath effect. However, this study is focused on the performance of the variables under consideration only throughout the shocks. The total number of deaths from the pandemic was relatively stable from the beginning of the war (see green line in Fig. 1), which served as the motivation to choose the duration of the pandemic shock. The variables are categorized into exchange rate and commodity prices (cocoa, gold, crude oil), trade variables (imports, exports, and trade balance) and other macroeconomic indicators (inflation and GDP). Table 1 provides a detailed description and sources of the data, while Table 2 provides the overall summary statistics. Table 2 provides the summary statistics for the overall periods considered in the study. All the variables have positive averages. Specifically, oil, cocoa, and gold prices recorded averages of 77.99, 2563.42 and 1348.28, respectively, while the average exchange rate was 3.554 GHS/USD. Also, non-oil imports, oil and gas imports and total imports had averages of 868.12, 217.36 and 1085.26, respectively. Regarding the export variables, the average for cocoa export is 137.28, gold is 390.26, other export is 218.02, timber export is 16.03 and total export is 993.69. Other macroeconomic variables such as trade balance, food and non-food inflation, and real GDP averaged −91.77, 11.26, 16.61 and 10.64, respectively. The negative value for trade balance indicated that the country is running a trade deficit over the sample period. That is, Ghana imported more than it exported to other countries. Furthermore, cocoa price, gold price, total import, non-oil import, total export, gold export and trade balance recorded the highest standard deviations, indicating that these variables have high variability around their averages. This is reasonable since most of these indicators are susceptible to shocks (Younger, 2016). In terms of dispersion, total import, non-oil import, and trade balance are normally distributed based on the pvalue of the Jarque-Bera normality test. Table 2 further shows that gold price, total import, non-oil import, total export, gold export, and other exports are skewed to the left while the rest of the variables are rightly skewed. Table 1 Variable description and sources. Variables Description and measurement Sources Exchange rate Domestic currency per US$, period average IFS Cocoa price International prices of cocoa beans (US$/tonne) BoG Gold price International gold prices (US$/fine ounce) BoG Crude oil price International Brent crude oil prices (US $/barrel) BoG Oil and gas imports Merchandise imports oil & gas (Millions of US$) BoG Non-oil import Merchandise imports of non-oil (Millions of US $) BoG Total import The sum of all imports BoG Cocoa export Merchandise exports of cocoa beans (Millions of US$) BoG Gold export Merchandise exports of gold (Millions of US$) BoG Timber and timber product export Merchandise exports of timber and timber products (Millions of US$) BoG Other export These include manganese, diamonds, residual fuel oil, electricity, bauxites, etc. (Millions of US $) BoG Total export The sum of all exports (commodities and noncommodities) BoG Trade balance Export less imports (Millions of US$) BoG Food inflation Prices of consumable food (measured in %) BoG Non-food inflation These include alcohol, housing and utilities, health, education, clothing, and footwear, BoG Overall inflation Overall index (2018 Average =100) BoG Economic Growth Bank of Ghana composite index of economic activity (Real Growth, %) BoG Note: IFS is International Financial Statistics (IFS), and BoG is Bank of Ghana. Source: Authors’ construction B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 6 Discussion of the various macroeconomic variables This section presents the discussions of the graphical dynamics of the macroeconomic variables under consideration. It is classified into three. The first subsection considers how exchange rate and international commodity prices performed uniquely under the various shocks, followed by the performances of exports and imports, as well as the average performances of trade balance, domestic inflation, and growth. Performances of commodity prices and exchange rate Fig. 3 shows the behaviour of exchange rate and international commodity prices under each crisis. It is observed that exchange rate trends positively under each shock implying a consistent depreciation of the Ghanaian currency relative to the USD on average while cocoa and gold prices fluctuate significantly across the three shocks. Oil prices, on the other hand, had a positive trend under COVID-19 but a negative trend under both the GFC and the Russia-Ukraine war. However, we Table 2 Descriptive Statistics (overall sample). Variables Obs Mean Std. Dev. Min Max JB Skew Kurt Oil price 196 77.99 25.196 26.63 134.79 0.000 0.189 1.956 Cocoa price 196 2563.42 392.523 1607.72 3430.35 0.019 0.048 2.299 Gold price 196 1348.28 337.269 630.61 2000.69 0.019 −0.08 2.302 Exchange rate 196 3.554 2.351 0.92 13.07 0.000 1.19 4.816 Total import 196 1085.46 250.969 483.05 1706.98 0.808 −0.006 2.738 Non-oil import 196 868.12 205.999 346.75 1381.73 0.919 −0.059 2.858 Oil gas import 196 217.36 91.424 11.91 580.28 0.000 0.975 4.36 Total export 196 993.69 346.48 305.39 1928.93 0.002 −0.446 2.321 Cocoa export 196 137.28 90.059 0.72 361.62 0.001 0.358 2.215 Gold export 196 390.26 139.447 106.32 724.68 0.008 −0.13 2.26 Other export 196 218.02 58.879 74.42 335.06 0.012 −0.558 2.799 Timber export 196 16.033 4.905 6.07 36.44 0.000 1.061 4.598 Trade balance 196 −91.77 269.284 −733.06 666.99 0.326 0.166 2.623 Food inflation 196 11.265 9.979 0.87 61.00 0.000 3.247 14.339 Non-food inflation 196 16.61 7.807 7.00 49.9 0.000 1.765 7.211 Economic growth 196 10.64 13.755 −10.47 73.36 0.000 2.048 7.752 Note: Obs =observation, Std. Dev =Standard deviation, Min =minimum, Max =Maximum, Skew =Skewness, Kurt =Kurtosis and JB =p-value of Jarque-Bera normality test. Source: Authors’ construction with data from BoG and IFS. Fig. 3. Performance of exchange rate and commodity prices Source: Authors’ construction with data from BoG and IFS. B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 7 observe relative stability in the rate of depreciation since the beginning of 2023 despite the escalating global effect of the Russian-Ukraine war. Cocoa prices increased in the first half of the GFC but decreased during the second half of 2008. There was also a mild decline in the first half of 2009 but a boost in prices during the second half of the year. During the period of the COVID-19 shock, cocoa prices initially declined in the first half of 2020, but prices increased afterwards and remained relatively stable before beginning to decline again after November 2020. The decline persisted up to July 2021 and then increased for a short period. From 2021Q4, cocoa prices have consistently declined, and the breaking of the war saw a further decline in cocoa prices till October 2022. Prices have however been appreciating since 2022Q4. Gold prices faced the same trend as cocoa prices during the GFC and war era but there were significant fluctuations during the COVID-19 era. Gold prices appreciated at the early beginning of COVID-19 but faced a long decline from August 2020 to April 2021. Gold prices remained relatively stable from the second half of 2021 till the war started. Oil price on the other hand kept appreciating from early 2008 till it suffered a persistent decline throughout the GFC. However, oil prices kept rising from the month Ghana recorded its first COVID-19 case and began to decline when the war started. Prices have declined persistently. The fitted monthly averages in Fig. 3 inform that relative to the other shocks, during the GFC, cocoa and gold prices appreciated on average - which is favourable for the economy since Ghana is a net exporter. This could be because the GFC restricted financial flows across the globe (Dominguez et al., 2012), making many countries rely on gold for external reserve backing, which drove the demand for gold and hence increased gold prices from 2008Q4. The upward trajectory for exchange rate for all three shocks is an indication of how fragile the Ghanaian economy has been in the past decade as it is very responsive across all the shocks. This is in line with the assertions of Ataguba (2020), Maijama’ and Musa (2022), Arndt et al. (2023), and Mhlanga and Ndhlovu (2023) that developing countries are susceptible to exchange rate fluctuations driven by imports and food prices. Also, during the GFC, as many economies were affected in mid-2008, the drive towards economic recovery was high for all economies from early 2009. Thus, international demand for products like cocoa increased which consequently drove its price in 2009. However, the restriction on international mobility of both persons and commodities Table 3 Mean values of indicators under each shock. GFC shock COVID shock Russia-Ukraine War Crude oil price 80.418 57.995 95.359 Cocoa price 2675.587 2469.221 2545.526 Gold price 920.43 1804.458 1831.514 Exchange rate 1.228 5.738 9.066 Total imports 740.858 1094.857 1171.088 Non-oil imports 602.358 900.011 796.605 Oil and gas imports 138.5 194.845 374.483 Total exports 462.892 1200.693 1455.813 Cocoa exports 110.311 124.335 134.821 gold exports 199.901 490.835 559.228 other exports 132.223 210.201 250.575 Timber and timber products exports 20.457 12.511 12.493 Trade balance −277.966 105.838 284.724 Food inflation 15.437 11.465 40.667 Non-food inflation 19.648 9.43 34.353 Economic growth 11.573 10.875 −1.015 Source: Authors’ construction using data from BoG and IFS. Fig. 4. Performance of imports Source: Authors’ construction with data from BoG. B. Tetteh and E. Ntsiful Research in Globalization 7 (2023) 100174 8 relatively stabilized the cocoa trade and thus, a mild increase in its prices was realized. Again, the results could be attributed to the recent globalization of the Ghanaian economy as well as the overdependence of the economy on the international market (Aryeetey & Ackah, 2011; Duho et al., 2022). Due to the significant role of Russia in the supply of oil to the world, it is not surprising that oil prices were averagely higher for the period of the war than under any other shock. Table 3 summarizes the weighted mean values of each indicator under each shock and confirms that the highest average cocoa price was observed during the GFC while the highest average exchange rate and prices of oil and gold occurred during the Russia-Ukraine war. Performances of imports of oil and gas and non-oil commodities Fig. 4 shows the dynamics of imports under the three shocks. During the GFC, the import of oil and gas was generally high in 2008Q1 but declined from 2008Q2-Q4 and began to rise in the early part of 2009. On the contrary, the import of oil and gas was steadily increasing throughout the COVID-19 era and continued to increase in the early part of the war but steadily declined after 5 months of the onset of the war. As a result of the war, oil prices were relatively high in 2022Q2, however, they declined from early 2023. On the other hand, non-oil imports were averagely stable in 2008 during the GFC but recorded a significant negative trend throughout 2009. During the COVID-19 period, non-oil imports were generally stable on average but moderately increased at the beginning of the war and steadily declined 5 months into the war. As oil and gas form a greater share of the overall import basket of Ghana, the overall import was significantly driven by the shape of the oil and gas import. The fitted monthly averages in Fig. 4 indicate that oil and gas imports were trending downwards under the GFC and the war crises (even in the long run) but were trending positively and steadily under the COVID-19 crisis. Also, there was a sharp decline in oil and gas imports at the emergence of the Russia-Ukraine war (i.e., short-run) because of the cut in oil supply, coupled with unprecedented depreciation in the cedi and poor economic growth. For non-oil imports, the fitted averages show a declining trend under the GFC and the war crisis but had a stable trend on average during COVID-19. Considering the overall import, a negative trend was observed during the GFC and the war crisis, but a positive trend was observed during the COVID-19. Moreover, this result is also confirmed by the recent globalization of the Ghanaian economy and its increased overdependence on the foreign market, making the country vulnerable to global shocks. The weighted means in Table 3 confirm that the average performance of oil and gas imports was highest during the war while non-oil imports were highest during the COVID-19 era. Performances of commodity exports (cocoa, gold, timber and timber products, and other exports) From Fig. 5, the export of cocoa beans increased in the first 5 months of 2008 during the GFC followed by a sharp and steady decline till October 2008 after which a positive trend was recorded. However, after 2009Q1, it dipped and persisted till the end of the year. From the onset of COVID-19 in Ghana, exports of cocoa beans instantaneously declined till November 2020 after which it began to rise, but a consistent decline was experienced again throughout 2021 as trade restrictions reduced. Though cocoa exports rose at the beginning of 2022, there was an immediate decline from March 2022 till 2022Q4. Additionally, cocoa exports have steadily declined since the beginning of 2023, as the war intensifies. Also, the export of gold under GFC was generally stable with a sharp decline in 2008Q4. As the shock dissipated and global economies began to perform, the export of gold began to improve in 2009. During Fig. 5. Performance of export indicators Source: Authors’ construction with data from BoG. B. Tetteh and E. Ntsiful