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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