Banks enjoying good environment – Oroh

The acting Managing Director/CEO of Zenith Bank Ghana Ltd., Henry Oroh, has downplayed reports claiming that a massive retrenchment exercise awaits banks due to the unbearable economic challenges confronting the sector, adding that banks are enjoying a good business environment in the country.

In an interview with the B&FT, Mr. Oroh said even though the country has had to deal with some major economic challenges in the past few years, it (Ghana) still remains a coveted business destination for most investors who have hope and confidence in a buoyant economy in the near future.

“Where else can you get a better environment? If you look around the world, every country has its own problems; but over the past few years we have seen Ghana provide a good environment for businesses. Here is peaceful, politically stable effective systems, and in relative terms there is more power supply in Ghana than most countries in the sub-region. And I think this has made the banking business good here in Ghana,” Mr. Oroh said.

He again stated that business confidence in the country is further enhanced by the deliberate efforts government and some state institutions are putting together to ensure that macroeconomic stability is achieved in the short-term.

“I think this is an economy that will grow because all government policies are geared toward creating an enabling environment, such as trying to keep the exchange rate stable and taking deliberate steps to deal with other important issues. So with these measures being taken by government I think Ghana is still attractive to investors, especially if you look at the inflow of investments that have come into the country in the past four years. This shows that Ghana is an economy that will stand out in the sub-region,” Mr. Oroh maintained.

Mr. Oroh’s comments are backed by the recent Business Barometer Indicator (BBI) of the Association of Ghana Industries (AGI), which shows that business confidence in the economy shot up significantly in the first quarter of 2016.

For the first time in eight quarters, business confidence surged from 95.9 to 101.9 -- a little above the baseline which is 100, an indication that industry’s confidence in the business environment has improved somewhat.

The survey had a sample size of about 500 respondents. The report indicates that in relation to power supply11.2 percent of respondents said the situation has highly improved, 40.7 percent said it has improved, 35.1 percent said they have seen a little improvement, while 13 percent said there has been no improvement.

However, concerns have been expressed by many industrialists about the high cost of power that is eating up the profit margin of many businesses in the country.

This the AGI report stated: “With regard to high tariffs for electricity and water, 45% said their businesses have been highly constrained by the high tariffs; 43% said their businesses have been constrained; 10% said their businesses have been less constrained; and 2% said their businesses have not been constrained. In the last quarter 2015, inadequate power supply, unstable currency, multiplicity of taxes, and delayed payments were the major challenges facing businesses in Ghana”.

AGI President James Asare-Adjei said government must thus do everything possible to accelerate restoration of macroeconomic stability in the country.

“The AGI therefore commends government for the economy’s seeming stability, and urges its managers to do everything possible to sustain and improve on the relative macro-economic stability in this election year.”