Business News of Thursday, 22 January 2015
Government’s industry-related policies and mode of handling macro-economic issues are tantamount to compounding the woes of industries, pushing many out of business, Kwame Appiah Baah, Ag. Brong Ahafo Regional Chairman of the Association of Ghana Industries (AGI) has said.
“Government is joking with a necessary ingredient in wealth-creation. If you joke with industry, it’s like joking with the heart of economic development. Industries are seriously feeling the pinch of macroeconomic indicators,” he told B&FT in an interview.
He mentioned the impact of the current energy situation in the country as a principle hostile commodity; depreciation of the cedi and cost of borrowing is astronomical. He lamented the interest rate hovering around 36-38%, saying “most businesses that access credit at this rate are unable to break-even”, and urged government to reduce the prime rate from 21% to affect lending.
He also stated that policymakers sometimes make business actors believe they have a “magic wand” to change their destiny. According to him, it is extremely difficult and bureaucratic to access financial support from government programmes such as the Export Trade, Agricultural and Industrial Fund (EDIAF), and Venture Capital, adding: “Government must not only look at promoting such policies but also evaluate how they will succeed in transforming the business community”.
Mr. Baah continued that the frequent change of Trade and Industry Ministers is doing the sector more harm than good. He explained that new ministers mostly do not espouse the dealings of their predecessors.
He claimed the AGI during the era of Madam Hanna Tettey signed a charter with the government in 2009 with the potential to change the face of industry, but none of her predecessors have acted upon it.
The Brong Ahafo Regional AGI boss however criticised some business players for not adhering to appropriate and standard managerial practices to better their fortunes.
He said: “Business is a shared responsibility; some people just run around and expect to have the desired results. As much as they expect government to implement supportive policies, they must equally strive on the right path”.
He described business in 2014 as bleak per the daunting challenges that confronted the sector, but is optimistic that things can turn around should all the stakeholders put their shoulders to the wheel.