Vice President Dr. Mahamudu Bawumia has blamed the sharp and frequent rise in inflation on increment in prices of petroleum products on the international market.

Ghana’s inflation rate as of Tuesday, stood at 13.9%, the highest the country has recorded in six years.

But speaking at the National Energy Transition dialogue, Dr. Bawumia explained that though a positive step, the global movement to cut back on fossil fuel in a bid to meet the net-zero emission level is already taking a toll on the global economy as funding for oil exploration and exploitation shrinks.

Its ripple effect, according to the Vice President, is responsible for the sharp and persistent rise in inflation.

Dr Bawumia made the call when he addressed the opening ceremony for a National Energy Transition Forum organized by the Ministry of Energy in collaboration with the Ministries of Transport, Finance, and Environment, Science, Technology and Innovation in Accra.

It is under the theme ‘Moving Ghana Towards A Net-Zero Future.’

It is estimated that Ghana’s energy production and usage accounts for more than 80% of the total greenhouse gas emissions in the country.

Though the need for energy remains crucial to improve the country’s economy, it is also important to reduce emissions from production and the use of energy by replacing high emitting fuels, particularly fossils with sustainable fuels, such as renewables.

Dr. Bawumia used the platform to underscore the need for transition but was quick to point out the huge price developing economies like Ghana have to pay for that to happen saying;

“We all have to be aware that this transition is going to take place over the next 30 years, but the costs of that transition are being felt today. There is less and less funding available for oil exploration and exploitation, and we are seeing this in an increase in oil prices globally. We in the developing countries are facing these very high costs of petroleum prices, and that is resulting in many economic impacts such as inflation as prices of goods increase in response to the increase in petroleum prices.”

He further stated that “There are many who have said that the petroleum price increase is going to remain at the high levels; we are not going to see any major declines. How do we as developing countries like Ghana adjust to this new reality, if it becomes a new normal of high oil prices and its impact on the macro variables in our respective economies ?” Dr. Bawumia queried.

As an important supplier of electricity to some ECOWAS countries, the Vice President made a commitment that Ghana shall increase the share of modern renewable energy (wind, solar, Waste to Energy, Small/Medium hydropower, hydrogen, etc.) in the national energy mix.

In the long term, the government according to Dr. Bawumia shall also take steps to promote clean energy sources including biofuels, Compressed Natural Gas (CNG), Electric, Hydrogen fuels, etc. as fuels for vehicles and provide low-carbon and highly competitive energy supply to establish Ghana as an energy and e-mobility hub for the West African Sub-Region.