The Chief Executive Officer of the Association of Ghana Industries, Seth Twum Akwaboah, says most businesses find themselves in a very difficult situation due to the prevailing uncertainty in the business space.
According to him, the recent policy measures undertaken by the Bank of Ghana and government have done very little to allay the fears of business owners in the country, due to the fact that there has been a failure on the part of these institutions to clearly define what the endgame of these policy measures are.
He stated that this has thus affected the planning and projection of most businesses in the country.
Speaking on JoyNews’ PM Express Business Edition, he said, “These are challenging times and indeed it’s a big dilemma that we find ourselves in. Do we continue doing business or we pack and go? At this particular moment you cannot pack and go, you must continue to do business but it’s a difficult situation for a lot of our businesses.
“The challenge we have is the uncertainty that is surrounding this whole business environment now. if people are clear what the horizon is, what the pointers are getting to, then you can plan on the basis of that. Even if you have consistent rise in policy rates and inflation and all that and you’re very sure how the endgame is going to be you can still plan around it. The difficulty we have is the uncertainty.
“And when you look at the AGI business barometer survey the major driver of the barometer coming down, the confidence level coming down is the uncertainty and this is where we find ourselves. The continuous rising of the policy rate and all the other macroeconomic indicators pointing to a negative direction is not giving certainty at all in the business environment, and that is indeed tough for businesses.”
His comments come on the back of the Monetary Policy Committee (MPC) of the Bank of Ghana increasing the policy rate by 250 basis point to 24.5%.
This is the highest policy rate increase since 2017.
The rate hike means it will become more expensive to borrow from the banks, a situation that will push the cost of living and doing business in the country further up.
Addressing the media, the Governor of BoG, Dr Ernest Addison, explained that the committee reached the decision in order to check the rising rate of inflation as the country negotiates with the International Monetary Fund (IMF) for an economic programme.
“Inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations”.
“The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path,” Dr Addison added.