Business News of Saturday, 5 August 2017
Ghana’s industrial subsector is still dominated by small size businesses. The development is also viewed as impacting on their employment prospects and their overall impact on the economy.
The latest Business Barometer report by the Association of Ghana Industries (AGI) however suggests that the businesses could improve their impact when given the needed support.
Of the 461 businesses surveyed in the second quarter Business Barometer report, 272 representing 59 percent were small scale businesses.
This category is followed by the medium size businesses which accounted for 28% or 129 businesses of the total.
Meanwhile the large businesses (51) were twice as much as the medium size (129) and about five times the small scale businesses (272).
A further breakdown also indicates that majority of businesses are engaged in manufacturing and services sector such as food processing, banking and communication.
The construction sector on the other hand, constituted just 14 percent.
The President of the AGI, James Asare Adjei however stressed the need for the government to pursue its economic policies that will make businesses more competitive.
His appeals follow the high expectation of businesses that the current economic conditions will improve going forward.
“Cost of credit and access to medium to long term credit still remain a major bottleneck to businesses. Currently, average lending rates are still high and it in some cases even above 35% and it is obvious that the declining policy rate has not inured to the benefit of borrowers where available businesses are able to borrow on the account of the high cost.”
He added, “Government through the bank of Ghana must make every effort to ensure that the reduction in the policy rate translates into lower interest rates for businesses.” Meanwhile the high cost of utility still remains one of the major challenges confronting businesses in Ghana.
According to the report, high cost of credit, multiplicity of taxes and cedi depreciation followed closely as top challenges for businesses.
Comparing the third and fourth quarters of 2016, 70% of businesses surveyed expected business confidence to improve.
This was higher compared to the about 57% recorded in the previous quarter.