Glovo, SG, others exiting Ghana due to uncomfortable economic indicators – Prof. Mensah

A senior lecturer at the University of Ghana Business School (UGBS), Professor Lord Mensah says multinational companies are exiting Ghana due to the nation’s uncomfortable economic indicators.

This comes on the back of several businesses of multinational companies in Ghana exiting the Ghanaian market.

Societe Generale is the latest to announce its exit from Ghana after 20 years of operating in the country. GLOVO last week stated that on May 10, 2024, they will stop operating in Ghana.

According to Glovo, the decision to leave Ghana is aimed at redirecting its resources to other countries where it operates.

“Whilst we recognize the potential of the Ghana market, building a stronger position and achieving profitability would require substantial investment over an extended period. This is why we have decided to redirect our resources towards the other 23 countries where Glovo operates to better serve the millions of customers who use the Glovo app every day,” Glovo stated.

Commenting on the development on Morning Starr with Francis Abban on Monday, the senior lecturer at the UGBS stated that there are several reasons for these companies to exit the Ghanaian market.

“I always say that if you want to know how the country is performing let’s look out for how people look for visas to travel outside the country and then also look out for businesses who are exiting.

"If you take the multinationals for instance that come to operate and they bring in their dollars, after their revenue has been generated in cedis they are not certain how the exchange rate will behave. It put pressure on them. Also the cost of input they use in doing this business.

“So effectively if your economy is not doing well, the signal and the things you look out for is how the businesses unfold and go away,” Professor Lord Mensah stated.

According to him, businesses at West Hill Mall that were foreign-owned have moved out for the past three years.

“So I always tell my friends that things are not good on the grounds because if you really want to see the signals and the performance of a country you may have to look at how the country attracts foreign direct investment and then immigration how people turn to have opportunities to move out.

“The more you get some of these numbers going up then, it tells you that things are not good on the grounds so I am not surprised these businesses are exiting and Ghana is one of the countries they prioritize to exit from on the continent. Because the country’s specific indicators that would make businesses comfortable are not good at all,” the UGBS professor stated.