Despite government’s determination to get the wheels of Industry moving, the Association of Ghana Industry (AGI) has indicated that the kind of business climate and incentives needed to bolster growth for local Industry are yet to be seen.
Although business confidence for Quarter four, 2018 saw an improvement over the preceding quarter, the Association worries over the slow pace of policy implementation, making it difficult for Industry to come alive.
In a communique, the Association noted that industry continues to bear the brunt of high cost of electricity and cedi depreciation, among others.
The local currency remains struggling to stabilize against the US dollar as it was selling at GHc 5.0040 by the end of last week. However, this may be much higher in other markets – such as the forex bureaus and black market – at between GHc 5.10 and GHc 5.20.
Government’s industrialization plan including initiatives such as 1D1F, the stimulus package, development of industrial economic zones and industrial sub-contracting in the wake of the African Continental Free Trade Area (AfCFTA), however, there has been delays in the release of funds to support the private sector in implementing these initiatives.
Competitive Electricity Tariff
Notwithstanding the need for a tariff regime that is structured in a manner that the utility service providers can recover cost in order to remain viable, the AGI expects that the ongoing discussion on the review of the electricity tariff should take the competitiveness of Ghanaian industry into account.
Ghana belongs to the high energy cost category of countries in the sub-region. This makes the country’s industry uncompetitive.
By Joshua W. Amlanu