Modulus CEO: Central Bank of Tunisia Illustrates Potential Fallout in Africa from Russo-Ukrainian War


Last month, the Central Bank of Tunisia announced the results of its board meeting which examined the financial effects of the Russian invasion. The Board, having followed closely the economic repercussions across the globe, found that international prices of raw materials, foodstuff, and energy are soaring and continue to affect trade, in addition to significantly altering budget projections, as the expense related to subsidies increased sharply, which will likely result in additional financing needs.

“While the Board decided to keep the interest rate unchanged, Tunisia’s Central Bank aims to take a proactive approach when looking at the Russo-Ukrainian conflict. There are so many moving parts that have ripple effects upon ripple effects. It is something that governments and private business interests alike should be watching, both inside Africa and beyond,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“The Board calls for extreme caution and for adoption of a proactive approach so as to offset fallouts from the Russian-Ukrainian crisis on the national economic activity and overall balances,” the press release noted.

“We’ve seen the inflation that has resulted from the war, particularly in the energy sector, which only compounded the inflationary issues caused by global Covid-19 relief packages. But, beyond inflation, there are many things to consider. Supply chain issues, particularly those which rely on Ukrainian interests have been strained,” noted Gardner.

“For example, one of the big question marks for the semiconductor industry, beyond pandemic-related supply chain issues, is the availability of neon gas, which is utilized in chip production. Roughly half of the global supply comes from Ukraine. The first question: will operations be able to continue unmolested? Perhaps more concerning is, even if they do continue without issue, will Ukraine be able to export easily? Chip manufacturers will likely be affected in accordance with how much they rely on Ukrainian vendors for their neon gas. Those manufacturers which rely heavily on Ukraine could face significant shortages if things don’t get better quickly. Even for those that don’t heavily source from Ukraine, if the geopolitical situation continues to deteriorate, it’s likely that prices will spike as the market in Ukraine draws down,” explained Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“That’s just one example, in one industry, of where we could see logjams or shortages. All because of a lack of raw materials. If you start to consider how an extended war could affect labor and energy shortages, as well as general regional disturbances, it is easy to see how much planning really needs to happen at the national level, as well as at the executive level in international firms,” said Gardner.

“It can’t be discounted that, as revenue from energy sales dwindles, Russia will need to find creative new ways to fund its war, as well as its domestic program. That could give way to an expanded campaign of hacking and cyberwarfare. It is imperative that institutions begin preparing for that possibility now. This war has moved beyond the battlefield and towards economic warfare. Contingency plans are critical, and Tunisia’s Central Bank is right to keep a watchful eye on the situation,” said Gardner.

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