Access to credit and cost of credit remained major constraining factors for businesses in the fourth quarter of 2013 with small and medium scale industries bearing the bigger brunt, the Association of Ghana Industries Business Barometer Survey has shown.
The Survey also cited high utility prices, taxes and high cost of raw materials as among the ten topmost challenges to business growth in the last quarter of 2013.
Mr Seth Twum-Akwaboah, Executive Director, AGI, said high utility tariffs and additional taxes announced in the 2014 Budget statement eroded business confidence in the fourth quarter.
Besides high cost of raw materials on account of import duties and the depreciation of the cedi impacted negatively on business confidence. This development, the AGI said, rendered businesses operating in the country non-competitive.
Overall, the fourth quarter saw a drop in the level of optimism among business operators compared with the third quarter as only 55 per cent of Chief Executive Officers (CEOs) interviewed were positive about the environment compared with 66.7 per cent in the third quarter.
Mr Twum-Akwaboah said although there was general improvement in electricity supply in the fourth quarter, electricity tariffs and competition from imports eroded gains from the manufacturing sector.
The services sector was more vulnerable to high utility prices, high level of taxation and access to credit, which emerged as top three challenges for the sector.
While power supply and high level of taxation were not challenges for the agriculture sector, access and cost of credit remained a formidable challenge to the sector.
On the construction front, contractors continued to experience lack of contracts and delays in payments for jobs already done. Mr Twum-Akwaboah said a business barometer indicator of 26.7 showed a significant loss of confidence in the business environment in the fourth quarter compared to 40.8 in the third quarter of 2013.
Despite the downturn, some businesses expect a positive first quarter of 2014, attributing their optimism to expected improved market, an enhanced purchasing power and human resource development.
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