Business confidence in Ghana at its lowest in history– AGI

 

The Association of Ghana Industries (AGI) has indicated that the current crisis confronting the Ghanaian economy calls for immediate action by Government to avert further deterioration of the present economic situation. This followed a meeting held by the Association in Accra on August 1, 2014, subsequent to the review of the 2nd quarter report of the AGI Business Barometer survey.

AGI’s Business Barometer for Q2, 2014 recorded the worst ever business confidence index of 22.42 down from 90.13 in Q1.

Clear indications are that the economic outlook and business confidence will worsen if steps are not taken immediately to stabilize macro-economic conditions. The AGI barometer captures business sentiments across various sectors of the Ghanaian economy on a quarterly basis.

Businesses continue to incur huge foreign exchange losses while Industry continues to shrink.With the rising cost of doing business, businesses risk shutting down if the trend persists.

The present economic conditions are not conducive enough to attract local and foreign investments which could generate the much needed employment. AGI believes the restoration of macro-economic stability is central to Ghana’s economic recovery.

To this end, AGI recommends the following to help restore macro-economic stability and to improve the economic outlook;

IMF intervention

In view of Government’s apparent inability to ensure fiscal discipline, AGI is of the opinion that the decision to engage with the IMF is the only option left.

AGI hopes that the engagement with the IMF would be managed to ensure that the country obtains value for money in all economic transactions. Further increases in the tax burden on the formal private sector risks killing the hen that lays the golden egg.

AGI is requesting active involvement of Industry in the IMF engagement processes to ensure maximum benefit for the entire country. AGI is ready to lend its support.

BoG rules

Stakeholder dialogue sessions and policy measures intended to restore macro-economic stability don’t seem to have made any significant impact. AGI is requesting that the Bank of Ghana (BoG) foreign exchange measures which were announced in February and which have not succeeded in stopping the currency depreciation be completely scraped.

This is the time to reassure the whole country that foreign exchange paid into our banks are welcome and will be secured.

Senchi report

AGI is aware of the commencement of the work of the implementation advisory group of the National Economic Forum report and will like to see an action plan with specific timelines defined to make monitoring possible. AGI reiterates its intention to monitor the implementation.

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