Business News of Friday, 6 March 2015
The Executive Director of GREDA, Sammy Amegayibor, has urged the government to reduce fuel prices in order to cushion the business community against the current economic challenge.
Mr. Amegayibor reemphasized the importance of taxes to the government but stressed that it should be looked at from a bigger perspective. The real estate industry expert pointed out that the government stands to lose more if businesses collapse or experience contraction rather than growth.
The country has been experiencing power cuts for some months now and this has not only affected homes but industries, including real estate.
The Marketing Manager of real estate developer Whitewall Properties, Kwesi Anderson, last month spoke out about the burden that the power crisis has placed on the industry. Mr Amegayibor echoed those sentiments, indicating that the high cost of purchasing fuel for power generators would not only affect the real estate sector, but the economy as a whole.
“I believe that when you have a problem you should look at the checks and balances. In this case, the government is losing out because businesses are folding. If the government’s business is to collect taxes to develop the nation and the businesses themselves are folding, then it is losing out on its source of income,” he said.
“In this current situation, it will be more prudent for the government to remove some of the taxes on fuel. Reducing the price of fuel is crucial for the business community because most of us now tend to buy fuel for power generators to support productivity. So I think if that can be quantified and the benefits can be measured, that will be the most prudent thing to do.”
He was quick to praise the president for his call to end the country’s power crisis. Mr Amegayibor however said that the government has to follow this up with action in order to realize this goal.
“I have to say, I like the way the president put it. That he intends to fix [the power crisis] and not manage it. It goes to say that we have been managing it in the past and this has ultimately led to it affecting us tremendously.”
Akua Nyame-Mensah, the Managing Director of Lamudi Ghana, echoed the thoughts of Mr Amegayibor while stressing the need for the country to focus on sustainable energy. She said investment in solar energy and sustainable building would save the country hundreds of megawatts of energy.
“The short-term solution would be to introduce some form of tax relief to the business community in order to ensure its survival. Currently, start-ups will be facing a huge challenge just to survive with the current power crisis, while other business units may have to fold up as a result,” she said.
“But I believe sustainable building and energy are key to ensuring not only the survival of the business community, but crucial to cutting costs to government.”
The country has been grappling with economic challenges in addition to the energy problems. However, the recently announced IMF relief package of US$1 billion is expected to reduce the government’s total debt as well as stimulate Ghana’s economy. This in the long run is expected to translate into growth for various sectors, including real estate.