The report suggests that sustained hostilities could trigger a wave of capital flight from countries such as Nigeria and Ghana, delay major development projects, and push up borrowing costs across the region. Investors are reportedly growing wary of emerging markets seen as vulnerable to external shocks.

Dennis O’Shea, a Certified Financial Modelling and Valuation Analyst, says the situation could unsettle fragile economies already contending with inflation and foreign exchange volatility. “These kinds of geopolitical flashpoints tend to spook international investors, especially when commodity-linked economies are in the mix,” he explained.

He pointed out that the Ghanaian Cedi, despite performing remarkably well this year, remains exposed. “Interestingly, both the cedi and the Russian rouble have been among the better-performing currencies in recent months. What they have in common is a reliance on commodities, gold in Ghana’s case and oil for Russia. These are assets that tend to attract investor attention during times of global instability,” he noted.

O’Shea warned that while commodity prices may offer temporary support, sustained geopolitical uncertainty could erode investor confidence in the long run, leaving economies like Ghana and Nigeria facing tightened fiscal space and reduced access to external financing.

--ChannelAfrica--