In the face of an economic downturn engaging in transactions geared towards economic downturn is improbable. Healthcare, food, consumer staples, and basic transportation are some of the relatively inelastic industries that can perform well during an economic downturn.
However, sustaining and/or managing individual transactions and businesses during economic downturn are often unfavourable. Alternatively, engaging in transactions that are profitable during economic downturn are mostly craved for.
Despite the present economic crisis across the globe, Ghanaians can benefit from the present economic state by assessing the understated opportunities available to individuals, firms and the government both within and outside the country. This article discusses some of the opportunities that can be capitalised on.
In the case of Ghana’s economic state, individuals can focus on profitable investments rather than just hodding resources to curtail losses. Presently, agriculture is a lucrative field in the country. From farming to ranching, individuals can invest their resources to engage in commercial farming or at least subsistence farming. The turnout will not just benefit the individuals but will also create employment and increase exports of goods. The higher the exports of goods and services, the higher the opportunity to strengthen the Ghana Cedis.
Alternatively, individuals that invest in the financial market especially cryptocurrencies must always be mindful of the fact that the cryptocurrencies are volatile despite it being lucrative. Investing in such a financial market is lucrative because the returns are profitable, especially in the case where the Ghana Cedis has depreciated in value in comparison to the US Dollar.
The value of the Ghana Cedis presently is a key deterrent for firms in Ghana that engage in a lot of imports (be it raw materials, finished goods or services) due to the exchange rate. However, the ongoing global crisis offers the opportunity for Ghana to penetrate through a number of markets. Two key opportunities firms in Ghana can capitalise on are agricultural and the creation of outsourcing hubs.
Agriculture never ceases to be a profitable venture. Despite this fact, it takes individuals, firms and the government to work hand in hand to maximise the profitability of this venture. In the absence of government subsidies and surplus, firms can still profit marginally by producing enough to export a portion for a higher return.
With regards to outsourcing, India is one of the fastest growing outsourcing hubs. Their services span across a number of countries including developed countries (for instance, the United States of America). Outsourcing can be categorised into professional outsourcing, IT outsourcing, manufacturing outsourcing, project outsourcing, process outsourcing, and operational outsourcing. Cheaper labour cost and availability of skilled workers make India one of the most attractive outsourcing hubs.
Although labour cost is cheaper in Ghana, there are several factors that come into play when corporations want to outsource. One of these factors is cybersecurity. The cyber frauds that have been associated with Ghana in times past might have been a major deterrent for foreign corporations to offer outsourcing projects to firms in Ghana.
Thanks to the arrival of Oduma Solutions which has brought hope to both existing and thriving firms upon its launch as one of Africa’s biggest cybersecurity operations centres. This is a breakthrough for Ghana since it can bridge the trust gap between Ghana and foreign corporations on the issue of cybersecurity. This should be an eye opener for businesses in Ghana to create outsourcing hubs to attract more foreign corporations to outsource projects to Ghanaian firms.
In the democratic settings of government, robust fiscal policies appear to be one of the best legacies one government can pass on to another. The present government of Ghana, can capitalise on long-term robust fiscal policies which can be beneficial to Ghana’s economy in the long-run.
In addition, the government of Ghana can offer more incentives to firms and individuals in the business fields discussed above to make these ventures more lucrative. The benefits the economy can reap by taking such steps outweighs the cost that can be incurred to incentivise such individuals and firms.
Adhering to the suggestions above will go a long way to benefit Ghana’s economy, not only in the short-run, but also in the long-run. In the same vein, the ACCRA Cost Of Living Index (Koo et al, 2000) will do justice to Accra (capital of Ghana) in comparison to other regions across the country in the long-run.
The writer is a doctoral candidate at Alexandru Ioan Cuza University of Iasi, Romania.
His research is centred on financial integration, trade openness and financial technology.
The author can be contacted at [email protected]