Despite the economic downturn in Ghana, there are massive opportunities made available in such a period which must be seized for growth and development, entrepreneur and managing director & founder of RAAD Industries, Adriano Dulgher, has said.
The Ghanaian economy is currently experiencing its worst period in decades. Consumer inflation has been on the rise in recent months, reaching an annual rate of 50.3 percent in October 2022 – placing much pressure on the country’s central bank to raise interest rates to curb inflation. So far this year, the policy rate has been raised by a historic 1,250 basis points (bps) or 12.50 percent to 27 percent.
Effectively, this has negatively impacted the financial market and business sector – as higher interest rates can make it more difficult for businesses to access credit, which can in turn slow economic growth and job creation.
Nonetheless, the Managing Director & Founder of RAAD Industries advocates that a downturn in the economy can create opportunities for growth and development, particularly in the housing industry.
“The potential for foreign investment, knowledge and long-term prosperity in Ghana is massive. This is often the case when the economy experiences a downturn, as it becomes more attractive and enticing for foreign investors to invest. This includes foreign outsourced investments, as well as investments from small entrepreneurs in the Ghanaian diaspora,” he said.
Provisional GDP data from Ghana Statistical Services (GSS) published in September 2022 indicate that overall real GDP for the first half of 2022 recorded an average year-on-year growth of 4 percent, compared with the average growth of 3.9 percent in 2021. However, economic activity slowed in September 2022 – as captured in a 1.2 percent contraction in BoG’s Composite Index of Economic Activity (CIEA) due to lower domestic VAT collections, port activity and cement sales.
According to the October 2022 survey, Business and Consumer sentiments have also continued to drop on account of rising inflation, cedi depreciation and uncertainty about future economic conditions.
“So, we see that an economic crisis is an opportunity for long-term industrialisation. Due to large imports, we see the opportunity of focusing on local manufacturing whereby you can grow long-term. So there’s a massive array of opportunity that comes in a recession, and if you don’t look at the bad stuff and you focus on the positive, you will see the true potential of growth. You’ll see that you can create something, that demand is there in the country to consume; and it’s an amazing opportunity,” Mr. Dulgher said.
In the area of real-estate, Mr. Dulgher further mentioned that there is massive potential for growth in the housing industry – which is faced with a housing deficit of 2 million units – citing his own expertise in this area.
He emphasised the importance of being proactive and taking action to identify and pursue opportunities, rather than letting fear or uncertainty hold one back.
“Even in difficult economic times there are opportunities to be found, and it is up to individuals to recognise and seize them. A downturn can create opportunities for foreign investment, as well as for local entrepreneurs and members of the diaspora to take advantage of these opportunities,” he said.
It’s worth noting that Ghana has experienced a significant economic downturn in recent years, with the country’s GDP growth rate declining from 14.4 percent in 2011 to 3.9 percent in 2019, according to the World Bank. This has been driven in part by a decline in commodity prices and reduced demand for Ghana’s exports, as well as by challenges in the country’s energy sector.
The economic downturn has had a range of negative impacts on Ghana, including rising unemployment and inflation as well as increased debt levels. However, as the speaker suggests, it has also created opportunities for foreign investors and entrepreneurs to enter the market and take advantage of the country’s favourable investment climate.
For example, the downturn may have made it easier for investors to acquire land and other assets at more attractive prices; and may have created opportunities for new businesses to enter the market and take advantage of gaps in it. Additionally, the downturn has likely increased the need for investment in infrastructure and other areas, providing opportunities for investors and entrepreneurs to contribute in the country’s long-term growth and development.
