Business News of Tuesday, 27 January 2015
Source: Graphic Online
Employers have added their voice to calls on the government to focus more attention in the provision of constant energy to guarantee sustainable and reliable supplies to businesses in the country.
“Without energy, businesses cannot operate and operate effectively to meet their aspirations and that of the country as a whole”, Mr Alex Frimpong, Chief Executive Officer(CEO) of the Ghana Employers Association (GEA) said at a news conference to announce the new minimum wage for the year.
The call comes at a time when the country was facing what experts have described as the country’s worst energy crisis since the early 80s.
The energy crisis which deepened from the beginning of last year, is getting worse by the day as the Akosombo lake continues to run dry, forcing the Volta River Authority (VRA) to shed more than 600 megawatts of power. The situation is worsened by the erratic supply of gas from the Nigeria and lack of funds by the government to purchase crude oil even at its lowest price ever in six years, to run the country’s thermal plants.
As a result, the profits of businesses are being fast eroded as the cost of operations have risen many folds.
The unpredictable and unsustainable power supply has forced many employers to lay off workers prematurely in their quest to keep their budgets within what some described as manageable levels.
The impact of all these challenges is also having a toll on the government revenue from taxes, particularly those derived from the profits of businesses.
For instance, last year, the Ghana Revenue Authority (GRA) failed once again to meet its target by three per cent in spite of the frantic efforts to collect more taxes for the state.
“These challenges should be a wake-up call for all to gear a lot of attention towards energy so that businesses can operate and do so effectively”, Mr Frimpong noted.
On the performance of the economy, he said: “We believe that in going forward, there should be the need for macroeconomic stability”.
“The economy must be predictable so that business can operate and become sustainable because it is important that we really deepen the culture of engagement on other socio-economic issues so that we can make progress in the country’’.
Last year, the economy was faced with a number of macroeconomic challenges as the cedi depreciated heavily against the major foreign trading currencies, particularly the United States dollar and the British Pound.
Inflation rose to about 17 per cent, the highest in more than two years while interest rate is currently about 32 per cent . All these have impacted negatively on the fortunes of businesses and also affected the investor confidence in the country.
The Ghana Investment Promotion Centre (GIPC) has failed to release information about the level of investments into the country except to say that more investors are showing interest.
On the issue of imports, Mr Frimpong expressed the concern of the GEA regarding the issue of the country “becoming the safe haven for sub-standard goods”.
He said the alarming phenomenon is “affecting employment; is affecting incomes; and it is also affecting the image of the country and we need to do better than we are doing now to discourage the trend from blowing out of proportion.”