Businesses need direct policy interventions — Study
BUSINESSES want the government to focus on crafting policies that will have a direct impact on their activities.
They also hold the view that such direct business assistance interventions will enable the operating environment to look more attractive to private sector investors.
At a time when businesses are complaining about the high cost of operations, the call is seen as one geared towards having the government to be deliberate with its policies to ease the pressure on them and create room for expansion to help reduce the high unemployment rate in the country.
The findings by the UK Ghana Chamber of Commerce’s (UKGCC) 2022 Business Environment and Competitive Survey identified the price of fuel as the most expensive cost item businesses are confronted with in the country. This phenomenon is said to be exerting further pressure on the already constrained operations and funds of businesses.
The emergence of fuel as a costly item comes at a time when crude oil prices have skyrocketed following the ongoing Russia-Ukraine conflict.
Other cost factors
The research also identified the cost of power, machinery and technology as part of the other major factors that are beyond the budgets of businesses.
According to the survey, respondents also held the view that the taxation policy, as well as land tenure issues, also posed economic challenges to doing business in Ghana.
Meanwhile, the cost of capital, which was 2021’s poorest-rated business component, was not deemed a great challenge in 2022, giving an indication that efforts made by the UKGCC and other stakeholders after last year’s report have been successful in this regard.
“It is no surprise that corruption has been highlighted as the most declined business component over the last five years, as it had been rated amongst the top business challenges over the years.
“This is worrisome as it appears the government’s efforts to curb this menace have not yielded results – instead, the perception is that corruption has worsened over the years. While corruption is seen as the worst-performing component over the past five years, lack of transparency, high cost of power, an unfavourable taxation policy, and high cost of capital closely follow,” it added.
Respondents believe that these components have seen the least improvements over the past five years and as such require some focus from the government and its agencies in order to improve the business environment.
However, the survey revealed that the problem of corruption had worsened as it appeared to be the topmost challenge for businesses in 2022 – similar to opinions expressed by businesses in the previous survey – signalling the need for more attention.
“This year, the majority of the respondents voted corruption to be the most worrisome business component despite the government's drive to kick out corruption,” the survey said.
Respondents suggested that the costs incurred to acquire skilled labour were among the most affordable their businesses incurred – a consistent pattern over the years.
Local marketing costs, certifications and quality control costs, as well as locally sourced raw materials, were also seen to be affordable in the Ghanaian business environment.
It appeared respondents classified these costs as being affordable in the previous survey as well.
Ghana’s available telecom facilities, cost and the availability of potable water, as well as availability of logistics partners, were business components respondents believed were favourable to their businesses.
The study conducted among member companies of the UK–Ghana Chamber of Commerce and other companies sought to assess the situation of businesses in the second half of 2022, and their plans and expectations for the near future, thereby presenting both the challenges and opportunities for business in Ghana.
It was taken by 306 respondents – an increase from the 47 businesses that participated in the prior survey of 2021. Respondents represented 16 industries and ranged from small to large companies.
The survey found that consistent with last year, businesses have a good view of the state of Ghana’s utility infrastructure, generally.
Also, the perceptions of the cost of land, availability of logistic partners, and access to land all improved compared to the previous year (2021).