Business confidence inches down in first quarter – AGI Business Barometer

The Association of Ghana Industries (AGI) Business Barometer for the first quarter of this year shows that Business confidence fell marginally as compared with that of the last quarter of 2017.

The business confidence index dropped to 100.5 from 107.9 recorded in the fourth quarter of last year.

Dr. Yaw Adu Gyamfi, President of the AGI, said while the first quarter of 2018 saw a number of positive signs including a good mix of the macroeconomic indicators, the business confidence seemed to be waning.

“Businesses have been under pressure from the high cost of credit, access to credit, delayed payments – particularly our contractors, and the high cost of electricity prior to the announcement of reductions in tariffs by the PURC,” Dr. Adu Gyamfi said.

Dr. Adu Gyamfi said the AGI National Council wants to see proactive government policies to deal with the challenges facing businesses.

First, the AGI sees that only a private sector-led industrial development with mutual support from public institutions to enforce import regulations will help check huge revenue losses and create sustainable employment and growth of the Ghanaian economy.

The AGI further notes that manufacturing, which represents a critical mass of the real sector of the economy, is becoming less competitive.

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It called for enhanced collaboration between the AGI and Customs Division of GRA to help check malpractices such as under-invoicing, under-declaration and erroneous description of imports in order to save manufacturing from the threat of collapse.

According to the Association, delays and charging of unofficial fees still persists, undermining trade facilitation programmes and reforms introduced last year.

The AGI also says duplication of mandates and services by some regulatory bodies at the ports is very worrying. It says the industry cannot bear the cost of such services already being delivered, and hence recommended the augmentation of existing structures to avoid excessive bureaucracy and undue costs to businesses.

“The paperless system is a welcome initiative, though it has not fully addressed all the challenges. To this end, AGI appreciates the discussions and institutional collaboration with the GRA and relevant institutions to help check malpractices at the ports,” Dr. Adu Gyamfi said.

The AGI, while commending passage of the Ghana International Trade Commission (GITC) Act, said it wants to see the impact of the Commission’s work on cases of consumer protection and unfair trade practices against the local economy.

However, the AGI pledged its support for the Commission and hads set up a private sector committee to closely monitor work of the GITC, the AGI President said.

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On the One-District, One Factory initiative, the AGI urged government to expedite action on the initiative, considering the slow pace of implementation – saying businesses are anxious to see clear support from government.

The AGI lauded government for the recent reduction in electricity tariffs, saying it has brought some relief to industry and non-residential customers.

“The high cost of electricity has often emerged as the number-one difficulty facing businesses, and the Association is optimistic the reductions will open up new prospects for businesses and accrue to our competitiveness as a country.

“The Association is calling for passage of the local content law for the construction sector.

“AGI recommends a form of credit certificate to offset outstanding statutory payments to local contractors. There is also need for legislation to cushion contractors who suffer delayed payments, in view of the huge pre-financing costs,” said the AGI President.

The Association also called for government’s attention to the development of tourism in Ghana, considering the fact that it is the fourth-highest foreign exchange earner in the country.

It called on government to strictly implement the 15-year tourism development programme, and also ensure that tourist destinations are well-developed.

The AGI has also challenged government to establish a state-of-the-art hospitality training institute.

GNA

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