The Executive Secretary of the Ashanti Business Owners Association, Charles Kusi Appiah Kubi, has indicated that businesses in the Ashanti Region and the entire country at large are going through rough times.
According to him, due to increases in VAT rate, banks borrowing rate, and other statutory obligations, coupled with reduced purchasing power, businesses, especially those that are into fast-moving consumer goods (FMCG), are struggling to survive.
He told the B&FT in an interview that apart from the difficult business environment, supplier credit has also been cut off due to the current economic uncertainties.
“There has been a reduction in the quantity of products we receive from suppliers, others are not willing to give us products on credit at all because they are also faced with challenges. Productivity has been affected, revenue has also been cut off, they [suppliers] have also been plagued with what we call delinquencies and default payments. So they wouldn’t want to over expose themselves to risks.
“This means that if you want to survive, you go back to the bank. But they have increased policy rate, they have increased borrowing rate over 40 percent. What is your profit line that you can take out about 42 percent out of that to pay for loans and other statutory obligations, and pay salaries and rent, among other things?” Mr. Kusi Appiah Kubi stressed.
Closure of businesses
Mr. Kusi Appiah Kubi further revealed that due to the afore-mentioned situation, a good number of business owners have had to close down their shops while those with several branches have closed down a number of their outlets. He further noted that a number of business owners have had to deal with several health conditions due to the challenges they are facing.
“The business environment is challenging. We are more challenged than the economy of this country. We are going down; most businesses are collapsing; people have closed down their businesses because they cannot bear the effects.
“Last year almost 50 percent of some of our members’ working capital went off because of inflation and forex losses. As if it was getting any better, government increased its expenditure and passed on the taxes to us.
“The worst part is that because GRA is not realising its revenue targets, they want to come and do this VAT invoice invigilation again,” he elaborated.
