Depreciation of Ghana cedi a big challenge to businesses
The depreciation of the national currency, the Ghana cedi against major currencies of the world such as the US dollar and British pounds has been cited among others as the biggest challenge to businesses in the country.
The results of a survey conducted by the Association of Ghana Industries (AGI) says depreciation of the Ghana cedi, inflation, cost of credit, access to credit, corruption, and bureaucracy of government pose difficulties to businesses in the country.
The report noted that the depreciation of the cedi is the biggest challenge to 61% of the respondents that were surveyed.
Inflation and cost of credit ranked second and third with 42 and 48 percent respectively. However, apart from these top three challenges facing industries, access to credit and competition from imported goods were also significant challenges faced by businesses in Ghana.
The results of the AGI’s quarterly report which primarily assesses the business climate in Ghana. The report titled “The AGI Business Barometer (BB), 2nd Quarter 2009” were released in Accra Tuesday July 14, 2009.
Essentially, the Business Barometer is to allow for timely and regular assessment of economic development in the country. Also, it points out the need for policy adjustments and monitors policy impacts on the business environment in Ghana, and further provides information for business planning or adjustments.
The survey sampled 207 respondents comprising top executives of companies in the agriculture, manufacturing, service and other sectors. However, the service and manufacturing sectors provided the bulk of the responses with 41% and 37% rates respectively.
The report acknowledged that the global economic crisis has hit Ghana’s business climate considerably, as against earlier speculations that any such effect would not be severe.
The survey also focused on the actual challenges faced by individual industries in Ghana. Top on the list was high cost of raw materials, inputs and utilities. It also identified the decline of purchasing power and local economic activities, access and availability of quality raw materials and lack of skilled workers (poor attitude and low productivity of workers) as challenges faced by businesses.
Speaking at the release of the report, the President of the AGI, Mr. Tony Oteng-Gyasi, noted that “our polytechnics, which provide middle level manpower for our industries are poorly equipped”. The implication is that for a long time to come this problem will persist. According to him, the education authorities must take the issue serious before the much advocated cooperation between industry and education for vocational training can properly take off. He added that “the nature of syllabus for our schools must be upgraded constantly” to meet the present demands in the business industry.
By George Nyavor