A policy think-tank, IMANI Center for Policy and Education, has raised concerns about the rate at which businesses in the country are disintegrating due to government’s inability to put the right policies in place to manage and expand the business sector.
The organisation disclosed this in a recent report it jointly authored with the Business Sector Advocacy Challenge Fund (BUSAC) on Ghana’s business environment.
The report, which examined major business challenges between 2011 and the first quarter of this year, said there were massive gaps in the country’s micro-economic indicators that stifle the growth of the economy.
The survey showed that access to financing emerged the prime challenge among some five problems that bother businesses; followed by inflation, foreign currency regulations, taxation and also corruption.
IMANI said the cost of credit was the major challenge of businesses and made reference to a World Bank WDI data, which said Ghana’s domestic credit to the private sector as a percentage of gross domestic product (GDP) increased from 15.1 percent in 2011 to 20.3 percent in 2015.
Growth of real private sector credit grew from 13.1 percent in 2013 to 26.6 percent in 2014 but fell to as low as 3.7 percent in 2015, as contained in the 2016 Budget.
It also considered policies, bills and regulations that were formulated within the afore-stated period and how discrepancies related to these caused limitations.
The report further mentioned that even though some interventions such as the Export Trade, Agricultural and Industrial Development Fund provided credit to some manufacturers, some private sector funding initiatives, including the SME fund which aimed at providing credit, were not implemented because they were linked to the China Development Bank (CDB) loan which experienced hitches.
CEO of IMANI, Franklyn Cudjoe, reminded government of the importance of creating opportunities that would develop the productive sectors of the economy.
He underscored the relentlessly high cost of credit, mounting inflation and the yawning budget shortfall which hindered the expansion of most businesses in the private sector, as well as employment.
By Samuel Boadi