Access to credit hampers business growth
Access to credit was identified as the top challenge of businesses in Ghana in the last quarter of 2013, according to the Business Barometre of the Association of Ghana Industries (AGI).
The Business Barometre is a survey conducted to gauge the state of the business climate, and to find out challenges facing industries from industry players.
Per the findings of the fourth quarter survey, Small and Medium Enterprises (SMEs) continued to bear the bigger brunt of access to credit and cost of credit which have consistently featured as top challenges in the AGI Business Barometre.
High utility prices, taxes and high cost of raw materials also featured prominently as key challenges facing the bigger companies in the last quarter of 2013.
Presenting the findings at a press briefing, the Chief Executive Officer of the AGI, Mr Seth Twum-Akwaboah said high utility tariffs and additional taxes announced in the 2014 Budget in the fourth quarter eroded business confidence to a large extent.
On sectorial challenges, high electricity tariffs took its toll on the manufacturing sector in the fourth quarter of 2013 as it depended heavily on power for production.
“It is worthy to note that the rising influx of imports took its toll on manufacturing as this manifested as competition from imports,” he said.
Also, the services sector was more vulnerable to high utility prices, high level of taxation and access to credit which came up as the three challenges for the sector.
The outlook for the agricultural sector remained positive as power supply and high level of taxation were not issues for the sector. Per the report, the sector will experience great transformation if the two major challenges regarding access and cost to credit were addressed.
According to the AGI CEO, contractors continued to experience lack of contracts and delays in payments for jobs done.
“The delay in payments has persisted since the first quarter. While private construction works progressed, contractors said many government projects are still on hold, except for the foreign donor-funded projects,” he said.
The President of the AGI, Mr James Asare- Adjei reiterated the need for policy makers to focus on addressing challenges facing the industry in order to make them more competitive.