Cedi Drop Reduces Business Confidence

Seth Tsum-Akwaboah

Seth Tsum-Akwaboah

Seth Tsum-Akwaboah
Seth Tsum-Akwaboah, Chief Executive Officer (CEO) of the Association of Ghana Industries (AGI), has attributed the recent dip in business confidence to the continuous depreciation of the Cedi against the dollar.

He also attributed the problems to the Bank of Ghana’s directives on foreign current accounts and the effect of an additional 2.5 per cent VAT introduced in January.

The survey revealed that 52 per cent of the respondents were unhappy with the directives.

Mr Twum-Akwaboah made this known at launch of the AGI’s Business Barometer survey report for the first quarter of this year in Accra.

The survey recorded a significant dip of 90.13 per cent in business confidence index, representing one of the lowest in recent years.

It sampled 446 valid responses from the regions in the manufacturing, service and agriculture sector.

The cedi depreciated against the dollar by 17.6 per cent by end of March, this year.

The survey also showed that local manufacturers, who imported raw materials were severely hit by foreign exchange losses while their margins were affected by the appreciation of input prices, utility prices and rising transportation costs.

According to Mr Twum-Akwaboah, the responses do not present any fine prospects for employment over the next six months, stressing that only 21.7 per cent of respondents foresee the opposite.

About 20.6 per cent of the respondents were exporters while 48.4 per cent were exporters.

They noted that even though export trade improved for the first quarter of 2014, about 10.5 per cent of their exports deteriorated over the same time.

Over 50 per cent of respondents were of the conviction that their export volumes would remain unchanged since they were uncertain of the export situation over the next three months.  Only 28.4 per cent of exporters intend to increase their exports.

By Samuel Boadi

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