Monday, 15 January 2018

Businesses disagree over operating challenges

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Adnan Adams Mohammed

Some business captains are complaining that the cost of doing business in Ghana is still inordinately high even as recent business confidence surveys point to improving enthusiasm among others.

 Koans Building Solutions Chief Executive Officer (CEO), Kofi Anokye has noted that the government’s inability to manage the local currency compounds the challenges of businesses since the businesses mostly trade using foreign currencies.

According to him, the selling price of the dollar against the cedi is around GH¢4.7 to US$1.0 which affects the cost of doing business in the country.

“Though there are positives, they have not been felt by the business community and the business community is so important when talking about macroeconomic issues,” he said.

Mr Anokye added that, government’s decision to remove taxes that are termed as ‘nuisance taxes’ did not affect businesses in any way.

In assessing the first year performance of the Nana Akufo-Addo administration,he stated clearly that government cannot boast of the removal of nuisance taxes as a way of making businesses survive in the country.

He said the nuisance taxes removal did not have any positive impact on businesses of the country.

“The removal of nuisance taxes was a political facial dressing by the government because it did not affect the cost of doing business positively” he stressed.

Mr. Anokye believes the NPP government only chooses what is convenient and not what is necessary when it comes to taxing and removal of taxes.

He later rated the government 48% on the removal of nuisance taxes.

Meanwhile, Investment Advisor, Michael Cobblah has impressed upon government to leverage on the huge investor confidence and appetite for Ghana and partner the private sector through Public Private Partnerships (PPPs) to finance projects such as the Gas Master Plan, roads, housing and sanitation projects.

Mr Cobblah who is Director of investment advisory services firm, C-NERGY Ghana limited explained that Ghana’s huge investor confidence is coming on the back of an enhanced economic profile of the country following the publicized economic stability, improvements in the macroeconomic indicators and new prospects in oil and gas.

PPPs have been identified as one of the alternate options to raise the investments required in bridging the country’s infrastructure deficit.

Several PPPs are being considered for various infrastructure projects stated in the budget. However, lack of a PPP legal framework to facilitate private investment is a major drawback.

A PPP framework provides a clear legal framework for developing, procuring, and revaluating PPP projects. We urge the Government to make the passage of the PPP bill into law a priority in 2018 to create jobs and advance efficiency.

The investment advisor challenged banks in the country to commit their capital to fund infrastructure projects initiated by government.

“We expect the top-tier banks to nurture their interest in the power and infrastructure sectors, more so when some of these banks purposefully sourced capital for this. The multiplier effect of any such capital deployment should boost economic activities,” Mr Cobblah pointed out.

The Bank of Ghana’s latest confidence surveys conducted late last year pointed to improved business and consumer confidence in the economy.

According to the Bank, the results of the survey reflect the favourable prospects for industry, household’s financial situation and improvement in the general economic environment.

Results of a survey conducted by the Association of Ghana Industries (AGI) dubbed Business Barometer (BB) for the first and second quarters of 2017 revealed growing optimism among businesses in the country.

This the AGI said was in response to the raft of measures government was rolling out, including the tax cuts and stimulus packages for some struggling businesses.

The BB measures the level of confidence in the business environment and predicts short-term business trends.

Ghana’s economy grew by 6.6, 9.0 and 9.3 percent in the first, second and third quarters respectively, driven largely by the oil sector.

It is instructive to note that the Ghana Statistical Service (GSS) had projected the economy to end the year with 7.9 percent growth. This growth was significantly substantial compared to the 3.6 per cent recorded in 2016.