Businesses across the country are overwhelmed with many challenges which have made some express mixed comments. For some, it would have been a better option to be employed by someone than to venture into their own businesses.
Manufacturers, on one hand, complain of high cost of doing business that emanates from high utility bills, high transportation costs, and high cost of raw materials which are mostly imported, among others.
Importers, on the other hand, are reeling under the pressure of an unstable cedi which is constantly depreciating against major trading currencies like the dollar and euro – thereby shrinking their capital and decreasing profit margins.
An importer of musical instruments, Richard Amamo who is the Deputy General Secretary of the Ghana Union of Traders Associations (GUTA) said: “Let me use a microphone as an example. Assuming the price was US$100 in January this year when the exchange rate was at GH¢4.2, you would get it at GH¢420,000 when you bought 1,000 pieces. But now that the rate is around GH¢4.93, you would buy the same quantity at GH¢493,000, a difference of GH¢73,000.
“It doesn’t end there. When the goods arrive at the ports, the duty on products is calculated using the current exchange rate. And for musical instruments, the duty on them is between 51-56 percent. So, in this case, the duty will be calculated on the GH¢493,000 rather than GH¢420,000 using the rate in January this year,” he said.
According to Prof. Peter Quartey, an economist at the University of Ghana: “The major issues affecting the business environment is the cost of utilities, cost of credit, and then taxes”.
He said: “With the taxes, they emanate from the exchange rate issue. When they import, their products are valued with the exchange rate. So, when the exchange rate keeps depreciating it certainly increases the amount of taxes they pay. So, ensuring stability in exchange rate will be a major factor that the business community would love to see,” he told the B&FT in an interview.
He further stated that any policy government comes up with should be one that will drive exports in order to stabilise the currency for the long-term.
“The long-term measures are things that will boost the real sector. I see very good policies which their implementationhas not really taken shape. For example, the One District, One Factory initiative is another brilliant concept that will add value to agriculture; and once we add value we can export. So, I will want to see, in the budget, measures to boost the Planting for Food and Jobs and One District, One Factory, which will add value to agriculture,” he said.
Prof. Quartey added that government must allow old policies in the previous budget to settle well before it makes any changes to them, in order not to destabilise businesses.
“Another factor that businesses are concerned about is policy changes. There should be less frequent changes in policies which affect businesses, so that there can be enough time for them to understand and become conversant with them before there are any changes,” he said.