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AGI NEWS DETAILS

AGI URGES GOVERNMENT TO SUSTAIN STABILITY IN BUSINESS ENVIRONMENT

Date: 2017-08-01

Business confidence continued to rise from 103.8 to 109.2 in Q2, 2017 according to the AGI Business Barometer report. Government’s effort towards ensuring macro-economic stability in the first half of the year is paying off. Against the background of a relative stability in exchange rate, policy rate and inflation figures dropping consistently, businesses expect to see the macro-economic fundamentals impacting positively on cost of doing business. Expectations of the One-District-One-Factory initiative and the stimulus package have also added to the outlook for quarter two. AGI therefore commends Government for the relative stability in the economy and urges the managers of the economy to endeavor to sustain and improve on the macro-economic indicators.

The Association would however like to draw Government’s attention to some of the worrying concerns that must be addressed to further boost confidence, going forward;

  • The high cost of electricity tariffs continues to render Industry uncompetitive. Reductions in energy sector levies have not reduced tariff levels significantly and it is critical for the current tariff regime where Industry pays more than residential consumers to be reversed. At tariff levels of over 19 cents kw/h, it is important to re-examine the current utility pricing and tax regime, if Government is to chart a competitive path for Industry. To this end, AGI re-iterates its commitment to work with the Energy Ministry and PURC to find lasting solution to energy pricing for Industry in Ghana. Government’s plan to seed 51% of the concessionary arrangement for local participation is laudable and AGI believes it will go a long way in resolving the cost of power to Industry. We urge Government to intensify the dialogue with Industry on the 51% composition.
  • For the third time running, policy rate saw another reduction (22.5% to 21%) in the last review. Nonetheless, Cost of Credit and Access to medium to long-term credit still remain major bottlenecks to businesses. Currently average lending rates are still high and it’s obvious that the declining policy rate has not inured to the benefit of borrowers. Where available, businesses are unable to borrow on account of the high cost. Government must make every effort to ensure that the reduction in policy rate translates into lower interest rates.
  • AGI urges Government to expedite action on easing port clearance procedures under the Single Window System and in line with best practice. Businesses still complain of undue delays and unapproved fees charged at the ports, adding up to the cost of doing business. Available data from the 2016 “World Bank Doing Business Across Borders” report indicates that Ghana ranks low, 154 out of 189 countries, trailing behind Cote D’Ivoire (150), Burkina Faso (102) and Togo (117). However we acknowledge Government’s intervention to improve operations at the port.
  • Finally AGI urges Government to deepen its stakeholder consultations, including  putting the necessary measures in place to ensure smooth implementation of all Amended Acts relating to business in order not to disadvantage Industry or bring undue cost to businesses.  

Signed: James Asare-Adjei

AGI President

For and on behalf of Association of Ghana Industries

If you need further information, please contact the Chief Executive Officer on 0302-779023/4

To download a copy visit the link below: http://agighana.org/uploaded_files/document/20426efb10c95eb23e032209c8461bb2.pdf