Business News of 2014-08-06

Industries are struggling to survive – AGI boss

The Association of Ghana Industries (AGI) says its members are struggling to manage their businesses under the current economic conditions.

The President of the AGI, James Asare Agyei on Eyewitness News said it is difficult to efficiently operate and make profit under the harsh socio-economic conditions.

According to him, business owners and captains of industry are at their wits end because “there is no end in sight to the current crisis that we are facing as a country.” This follows a business barometer report released on Tuesday which indicated that business confidence in Ghana has dropped from 90.13% in the second quarter of 2014 to 22.42%.

These figures according to the AGI President were derived from captains of industries, Chief Executives and business owners. “They have been on the ground and they know the difficulties they face in the operations of their businesses in quarter two and they have also projected in respect of business confidence in the six months ahead of us,” explained Mr. Asare Agyei.

The business barometer survey is an empirical data collected across the country in all sectors of the economy which gauges how well businesses are doing and the business confidence level in the country. Elaborating on the findings in the report, Mr. Asare Agyei mentioned that in the first quarter of 2014, the business confidence level dropped from 102% to 90.13% which is below the base line of 100%.

The results from the second quarter survey according to the AGI boss are “very grievous because “there was a sharp drop in business confidence in the economy.” He asked, “If you lose half of your balance sheet as a business entity, wouldn’t you say that you are in crisis?”

He attributed the unfortunate development to the rapid depreciation of the Ghana cedi, high inflation rates, erratic utility supplies, increase in petroleum and utility prices as well as government policies aimed at stabilizing the economy.

Mr. Asare Agyei complained that if drastic measures are not taken in the short term, “it will be very difficult for us in going forward…We are in very difficult crisis when it comes to managing businesses.” The AGI however endorsed government’s decision to seek a bailout from the International Monetary Fund (IMF).

Although the IMF intervention has been criticized by some Ghanaians, the President has indicated that it is policy credibility, increase confidence from the international financial institutions and also to restore the economic stability and growth.

Mr. Asare Agyei said the AGI will fully support any decision or intervention which will restore confidence in the economy. “Industry is all for it and that is why the AGI supports the decision of government to actually initiate dialogue or processes for IMF intervention,” he remarked.

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