Economist Professor Peter Quartey says businesses can expect some relief from rising borrowing costs in the short term.

However, he cautions that the relief may only be temporary.

Speaking on Joy News’ PM Express Business Edition on Thursday, Prof Quartey said businesses should not expect the cost of credit to rise in the immediate future.

“Oh yes, certainly businesses should be comforted, but temporarily,” he said.

He said the outlook would depend largely on developments in the global economy.

“I mean, we should just touch wood, touch wood if nothing happens, if the prices come down, if what is happening in Iran between Iran and the U.S. doesn’t escalate and things get better, then why not?” he said.

“I believe things will get better, but at the moment, it’s a temporary relief for businesses.”

According to Prof Quartey, businesses are not expected to face higher credit costs over the next few months.

“We’re not expecting to see higher costs of credit, at least in the next month or two,” he said. But he warned that Ghana’s limited economic buffers leave the country exposed to external shocks.

“Yes, you will notice that, I mean, for these countries that are even fighting, Iran, U.S., and the rest, they have a buffer,” he said.

“They have oil reserves that they can fall on.”

“I mean, we basically have very little buffer to fall on, and therefore, anything that happens is we, we, we, I mean, when they sneeze, we catch a cold.”

Prof Quartey said Ghana’s dependence on imported processed fuel adds to the vulnerability.

“And I think we are not processing enough of the oil,” he said.

“We are an oil producer, but we are not processing quite a good chunk of the oil. We still continue to import processed fuel, and that is a big problem for us.”

He also pointed to Ghana’s continued dependence on petroleum products while other countries are moving rapidly towards alternative energy sources.

“Secondly, we’re relying too much on fuel, petrol and, you know, crude, for instance, whereas in other countries, other forms of fuel, green energy, green transition is happening rapidly,” he said.

“That is not happening so much with us, and I think that makes us very vulnerable to external shocks.”

Prof Quartey also highlighted Ghana’s dependence on gold exports.

“And if you even look at our exports, for instance, at the moment, gold accounts for almost 60% or 61% of our export earnings,” he said.

“That puts you in a very vulnerable situation.”

“Should gold prices tumble, or should anything happen to the international market, we are likely to suffer the consequences.”