Business News of Wednesday, 4 February 2015
Source: Graphic Online
The Association of Ghana Industries (AGI) has called on the government to put in place a short-term, time-based action plan to address the current energy crisis in the country.
According to a communiqué issued by the AGI’s National Council, the worsening energy situation continued to affect the confidence level of the business community in Ghana.
The President of the AGI, Mr James Asare-Adjei, who read the communique at the launch of the association’s fourth quarter Business Barometer Report in Accra yesterday, said consistent power outages experienced by businesses in the country had taken a major toll on the business environment, especially the manufacturing sector.
“The association reminds the government of its promise to bring on board emergency power barges to increase the generation of power by the end of the first quarter of 2015,” he said.
According to Mr Asare, the energy situation had contributed to “an unprecedented negative eight per cent growth in the manufacturing sector”.
“The manufacturing sector continues to shrink and Ghana risks losing its industrial base if government policies do not quickly address these challenges to revive the industrial sector,” he said.
The report mentioned the consistent energy crisis and lack of access to credit as the leading challenges affecting businesses in Ghana.
It was read by the Chief Executive Officer of the AGI, Mr Seth Twum-Akwaboah.
It also cited the cedi depreciation, the high cost of credit, unfair competition on the market, high labour cost, the multiplicity of taxes and excessive port charges as some factors which were negatively affecting the growth of Ghanaian businesses.
It said although the confidence level of businesses in Ghana had risen from 42 to 98 per cent, the current energy situation, coupled with the difficulty faced by small and medium-scale businesses in accessing financial assistance, continued to affect businesses.
The report said power outages experienced in the third and fourth quarters of last year negatively impacted on businesses, thereby affecting the confidence level of employers.
On the export situation, it stated that 88 per cent of businesses in the country were not into exportation, while only 12 per cent export their products.
“Thirty-two per cent of these exporters considered their current export situation as better than quarter three of 2014. Again, while 35 per cent recorded a decline in their export market in quarter three, only 30 per cent experienced a decline in quarter four,” it said.
The report said 73 per cent of employers had no intention of increasing their workforce on account of unfavourable economic conditions.
“As many as 56 per cent are unsure of what conditions will be in the next six months. Only 27 per cent who are slightly optimistic anticipate increasing their workforce in six months,” it said.