General

In Ghana today, a quiet but important economic shift is taking place. After a period of intense price increases, inflation has been declining.  According to available data, Ghana’s annual inflation averaged about 39-40% in 2023 and fell to roughly 20-23% in 2024. It continues to fall. On paper, this is a significant improvement. Policymakers, economists, and international partners often interpret this trend as a sign that the economy is stabilising after years of turbulence driven by currency depreciation, global shocks, and domestic fiscal pressures. Yet across markets, trotro stations, campuses and offices in Accra and beyond, the reaction is very different.  “Rice is more expensive than last year.” “Transport fares haven’t come down.” “Everything still feels costly.” So what really happened? What explains this disconnect? The answer lies in a simple but often misunderstood truth that lower inflation does not mean lower prices. What inflation really measures. Inflation measures how fast prices are increasing, not whether they are high or low.  It is calculated as the percentage change in the Consumer Price Index (CPI), which tracks the cost of a basket of goods and services such as food, transport, housing, and utilities. When inflation is high, prices are rising quickly. When inflation falls, prices are still rising, but more slowly. This distinction is important. For example, JoyNews reported that Ghana’s inflation rate averaged 40.27% in 2023, the highest in over two decades.  Even though inflation dropped in 2024, it remained above 20%, meaning prices continued to rise significantly, just not as rapidly as before. Rice Prices as A Real Ghanaian Example. Consider a common household staple like imported rice. Many consumers in Accra have observed that a bag of rice that sold for around GHS 300–350 in 2022–2023 rose to GHS 450–500 or more by 2024–2025 (depending on brand and market location). This is not inconsistent with falling inflation. Instead, it reflects how inflation works over time.  First, prices increased sharply during the high-inflation period.  Then, even after inflation slowed, prices continued rising, just at a reduced pace.  But still, the earlier increases remain “locked in.” So when someone says, “inflation is falling,” and a trader responds, “but rice is still expensive,” both statements can be true. Transport fares and daily costs. Transport provides another clear example. Between 2022 and 2023, Ghana experienced multiple fuel price adjustments linked to global oil prices and the depreciation of the cedi.  These increases led to repeated upward adjustments in public transport fares. Even when inflation began to decline in 2024, transport fares largely remained elevated.  This is because fuel prices did not fall significantly enough to justify fare reductions.  And operators adjusted fares upward to cover past cost increases.  So costs such as spare parts that are often imported remained high. For commuters, the lived reality is simple: we are still paying more than before. The Power of “Accumulated Inflation”. One of the most important concepts for understanding Ghana’s situation is cumulative inflation.  Inflation compounds over time. A period of high inflation permanently raises the general price level. Back-to-back increases dramatically raise the cost of living. Even if inflation falls, it does not undo those earlier increases. Prices continue from a much higher starting point. This is why many households feel that “things are worse,” even when macroeconomic indicators show improvement. Why food prices hit harder. Another reason for the disconnect is that inflation is an average, but people experience specific prices. In Ghana, food carries the largest weight in the inflation basket; it’s about 43% of the CPI.   This means that if food prices rise sharply, households feel it immediately. Even if other prices stabilise, food inflation dominates daily experience. Food prices are influenced by, exchange rate movements (many inputs are imported), transport costs, weather and agricultural output, and storage and distribution inefficiencies. As a result, food inflation often feels higher than the headline inflation rate. The Exchange Rate Effect. A key driver of Ghana’s inflation in recent years has been the depreciation or appreciation of the Ghana Cedi. When the cedi weakens, imported goods become more expensive, fuel costs rise, and production costs increase. Businesses respond by raising prices.  Even when the cedi stabilises, as it has more recently, prices do not automatically fall. Businesses rarely reverse price increases unless costs decline significantly and consistently. This explains why stabilisation does not immediately translate into relief at the market level. Why lower inflation still matters. If prices are still rising, why do economists emphasise falling inflation as a positive development? Well, because stability matters! High inflation creates uncertainty. Businesses struggle to plan. Investors hesitate. Households cannot predict future costs. A declining inflation rate signals that price increases are coming under control, even as they’re still increasing. This creates a more predictable environment for economic activity. In Ghana, the recent decline in inflation has been supported by tight monetary policy by the Bank of Ghana, fiscal adjustments under IMF-supported programmes, and the relative stabilisation of the exchange rate. These measures are beginning to slow the pace of price increases, even if they have not yet reduced prices. Why People Feel Left Behind. Despite these improvements, many Ghanaians do not feel relief. This is not a misunderstanding because it reflects real economic pressures. Three key factors explain this. 1. Prices Rose Faster Than Incomes: Wages have not kept pace with inflation. Many workers, especially in the informal sector, do not receive automatic wage adjustments. Even in the formal sector, salary increases often lag behind inflation. This means purchasing power has declined. 2. Essential Goods Are Still Expensive: Households spend most of their income on food, transport and rent. If these remain expensive, overall well-being does not improve, regardless of what inflation data shows. 3. Expectations vs Reality: People naturally interpret “lower inflation” as “things are getting cheaper.” When this expectation is not met, it leads to frustration and distrust. This is not a failure of the public sector. It is just a communication gap. Communicating Inflation Better. The challenge then is more than

We like to believe that markets run the world. We like to believe that capital flows according to logic. That innovation determines winners. That business success is simply the outcome of better ideas executed with discipline and in a competitive but ultimately fair environment.It is a neat story. It suggests that with enough effort, intelligence, and persistence, anyone can rise. But it rests on a quiet assumption that is so deeply embedded that we rarely question it, the assumption that markets exist independently of power.They do not.Markets are not natural ecosystems that emerged on their own. They are constructed environments that are designed, regulated and enforced. And the architects of those environments are not entrepreneurs or investors.They are states.Every market you participate in is already shaped before you arrive. The rules are written, the boundaries defined, the risks are categorised, the currencies are stabilised, and the contracts are enforceable, or not. These lead to an uncomfortable but necessary conclusion: if you do not understand power, you are not fully participating in the market. You are operating inside a system you did not design. The Comfort of the market narrative.The idea of the “free market” is powerful not because it is entirely accurate, but because it is useful. It simplifies complexity. It removes politics from any analysis while allowing business leaders to focus on variables they feel they can control, like pricing, efficiency, innovation, and growth.And for a time, particularly in the post-Cold War period, this simplification felt justified, even in Africa. Globalisation expanded rapidly. Trade barriers fell. Supply chains stretched across continents. Capital moved at unprecedented speed. Institutions multiplied. The language of cooperation dominated. It seemed briefly as though the world had moved beyond power politics. But that was never quite true.What actually happened was more subtle and more visible now. Power became embedded in the markets rather than disappear.Instead of overt confrontation, power expressed itself through systems like financial architecture, regulatory frameworks, global institutions and technological standards. It became less visible and therefore easier to ignore for the solely business-minded.But ignoring something does not remove its influence. The market is not the game but the outcome.We tend to analyse markets as if they are the starting point. They are not. Markets are outcomes. They reflect deeper structures through legal systems, political stability, institutional credibility and global hierarchies.When capital flows into one country and avoids another, we often attribute it to “investor confidence”. But what shapes that confidence? Why is one jurisdiction considered safe and another risky, even when the underlying opportunities may be comparable?The answer is rarely just economics. It is structure. And structure is power in its most enduring form. Structural Power is winning before the game begins.There are two fundamentally different ways to win in any system. The first is competitive: you perform better than others within existing rules. The second is structural: you shape the rules so that your advantages matter more.Most businesses focus on the first. States focus on the second. This is what scholars refer to as structural power, the ability to define the environment within which all actors operate.It determines which currencies dominate global trade, which legal frameworks govern international contracts, which standards become universal, and which technologies become indispensable.Consider the persistence of the US dollar in global trade. It is not simply a matter of convenience. It is the product of decades of institutional design, geopolitical positioning, and network effects reinforced by policy.Or take the European Union’s regulatory reach. Standards set in Brussels often shape production processes far beyond Europe’s borders, not because they are imposed directly, but because access to the European market requires compliance.Or China’s infrastructure strategy across the Global South. Through financing, construction, and long-term engagement, China is not just building roads and ports but reshaping connectivity itself.These are not isolated developments. They are expressions of structural power. And they operate quietly, continuously, and effectively. The illusion of distance from Africa.One of the most persistent misconceptions in business is that geography defines exposure. It does not. In a deeply interconnected system, distance has been replaced by dependency.A policy shift in Washington affects liquidity in Accra. A regulatory decision in Brussels reshapes production in Kumasi. A disruption in Asian supply chains alters pricing in Tema within weeks. War in the Middle East? Point made.What matters is not where something happens. What matters is how systems are connected. And once you are part of a system, you are exposed to its dynamics whether you understand them or not.African economies occupy a particularly complex position within the global system. They are fully integrated into global markets by exporting commodities, importing technology, participating in financial networks and engaging with international institutions. But we often have limited influence over how those systems are structured.This creates a subtle but important asymmetry: participation without control. And that asymmetry has consequences. It means that external shocks are transmitted quickly, policy changes elsewhere have local effects and strategic options are sometimes constrained by global rules.This is not a question of capability but a question of position. And position, in a system shaped by power, matters a lot! Permission is the hidden variable.We often describe opportunity as something to be discovered. But in many cases, opportunity is something that is allowed. Markets open because rules permit them. Capital flows because systems enable it. Innovation scales because infrastructure supports it. Remove those enabling conditions, and identical ideas can produce entirely different outcomes.Which raises a question that is rarely asked openly: how much of YOUR success, MY success, is driven by ability, and how much by access to the right structure?This is not to diminish effort or talent. It is to recognise that effort and talent operate within constraints. And those constraints are not neutral. Narratives as a form of power.Not all power is material. Some of the most influential forms of power are cognitive. They are embedded in ideas, language, and perception. Narratives shape how countries are classified, how risk is priced, how opportunities are evaluated, and how decisions are justified.Terms like “emerging market”, “developing economy”,

International politics often appears governed by indisputable laws. States pursue power, mistrust rivals, and compete for survival in a world without a central authority. This view, associated with realist traditions in international relations, suggests that the basic structure of global politics is fixed and that states must behave the way they do because the system demands it. Yet this picture is incomplete. The international system is not simply imposed on states by material forces. It is also shaped by ideas, shared expectations and social practices. Understanding this insight, which is central to the constructivist tradition in international relations, helps explain why international politics evolves, why cooperation sometimes replaces rivalry, and why norms and institutions can reshape the behaviour of states. From this perspective, the international system is best understood as a social construction, a system whose rules, meanings and identities are produced and reproduced through interaction. Beyond material power For much of the twentieth century, international relations theory was dominated by materialist explanations. Realist thinkers emphasised military power, economic capability and the distribution of resources across states. The international system, they argued, is defined by anarchy and the absence of a central authority, which compels states to rely on self-help and competition for security. Constructivist scholars do not deny the importance of material capabilities. But they argue that material resources alone cannot explain how international politics works. Equally important are the shared meanings attached to those resources. Alexander Wendt famously captured this insight when he argued that the “fundamental structures of international politics are social rather than strictly material” and that these structures shape actors’ identities and interests.   Material capabilities acquire political significance only within a web of shared understandings. Nuclear weapons, for example, are not interpreted the same way regardless of who possesses them. Hundreds of British nuclear warheads pose little perceived threat to the United States, while a handful of North Korean missiles trigger intense alarm. The difference lies not in the material capabilities themselves but in the relationships and expectations between states.   Power, in other words, is not purely physical. It is socially interpreted. After typing this, I feel like I should have already known this before reading Wendt. Maybe the penny has now dropped properly. Anarchy is what states make of it One of the most influential contributions to this debate is Wendt’s argument that “anarchy is what states make of it.”   Realists typically treat anarchy as a fixed structural condition that inevitably generates competition and mistrust. Constructivists challenge this assumption. The absence of a central authority does not dictate how states must behave. Instead, the meaning of anarchy depends on the patterns of interaction among states. States can interpret anarchy in multiple ways. In some cases, it produces rivalry and suspicion, which realists describe as a security dilemma. But in other contexts, states develop cooperative relationships and mutual trust, creating what scholars call security communities. The key point is that these outcomes are not predetermined by the structure of the system itself. Rather, they emerge from repeated interactions, shared expectations and the gradual formation of collective identities. If states expect hostility, they prepare for conflict and reinforce competitive behaviour. If they develop norms of cooperation, they can transform the same anarchic system into one characterised by trust and collaboration. The structure of international politics therefore evolves over time as states interpret and reinterpret their relationships with one another. How ideas shape interests This constructivist perspective also challenges a core assumption in many traditional theories, that states have fixed, pre-defined interests. Constructivists argue that interests are not given in advance. Instead, they emerge through social processes. Actors define what they want based on their identities, roles and relationships within the international system. As Wendt explains, identities, which can be defined as relatively stable understandings of who actors are, form the basis of interests.  States act differently toward allies, rivals and partners because each relationship carries distinct meanings and expectations. These identities themselves develop through interaction. A state may see itself as a defender of international law, a regional leader, or a revolutionary challenger to the existing order. Such self-conceptions shape how it defines its interests and chooses its policies. The result is a dynamic system in which identities, interests and institutions evolve together. Social structures and political practice Constructivists also emphasise that international politics is structured by social practices, the repeated actions through which norms and expectations become embedded. Wendt describes social structures as consisting of three elements: shared knowledge, material resources and practices.  While material resources provide the physical capabilities of states, shared knowledge and practices determine how those capabilities are interpreted and used. Social structures exist only as long as they are reproduced through action. When states change their behaviour, they can transform the system itself. This insight helps explain major historical shifts in international politics. The end of the Cold War, for instance, did not result simply from changes in military capabilities. It also reflected transformations in ideas, identities and expectations among political leaders and societies. When the United States and the Soviet Union stopped treating each other as enemies, the social structure that defined the Cold War effectively disappeared. Norms and emerging technologies Constructivist insights are particularly useful in understanding how new technologies reshape international norms. Consider the emerging debate over autonomous weapons systems. These technologies raise complex legal and ethical questions, but they also illustrate how norms evolve through practice. Scholars note that standards of appropriate behaviour can emerge not only through formal negotiations but also through the everyday practices of developing, testing and deploying technologies.   As states experiment with new military tools, they gradually establish procedural norms and informal expectations about how these tools should be used. Over time, these practices may influence broader international norms and legal frameworks. The development of drone warfare offers a precedent. What began as an experimental military capability eventually reshaped expectations about remote targeting, surveillance and the acceptable use of force. Technology, therefore, does not simply alter the balance of power. It can