BUSINESS operators in the country should look out for and take advantage of emerging opportunities in the current challenges facing the economy rather than losing confidence which can lead to lifetime disruptions to their operations, an international equity investor, Dr Vikram Mansharamani, has advised.
The sliding cedi and its impact on inflation, the increasing cost of credit and the general loss of confidence in the economy, he said, were perfect combinations that could trigger a despair similar to the trend within the local business community of late.
That notwithstanding, Dr Mansharamani, who is also a lecturer at the Yale University in the United States of America (USA), said glimpses of opportunities often existed in such challenging times and with the right strategies in place, therefore, a forward thinking company could rake in more revenues rather than falling apart.
"Challenging times often require long term thinking and if you think tomorrow will be better than today, you will make sacrifices for tomorrow. But if you worry about tomorrow, then you will consume whatever you make immediately and you don't think about tomorrow," Dr Mansharamani said, emphasising the need to remain resilient in troubling economic times.
He gave the advice at this year’s Festival of Ideas by Legacy & Legacy.
He was one of the four speakers at the event which brought together seasoned business owners, chief executives and entrepreneurs to share ideas on how to modernise their operations and move their businesses forward.
The event was instituted in 2008 to create the platform for captains of industry to come together and deliberate on key issues facing their operations and chart a new course.
On overcoming challenging times, Dr Mansharamani "challenges will always come but the advice is that business leaders should always equip themselves with the relevant tools and constantly update their strategies to meet the needs of ever-demanding trends."
"If they do that, their organisations will remain profitable and globally sustainable despite the challenges," he said.
Spotting bubbles
About three years ago, Ghana's economy was the envy of its peers within the subregion and the globe at large. That was because the economy was buoyant, and grew at 14.4 per cent in 2011 and 7.1 per cent in 2012.
Inflation, which measures the average change in prices of goods and services on a monthly basis, was also averaging 8.5 per cent consistently for two years after dropping from a double digit to a single one in June 2010.
These happenings endeared Ghana to the international investor community and that translated into increased foreign direct investments (FDIS) as reported by the Ghana Investment Promotion Council (GIPC) at the time.
Three years down the line, however, the story has changed and the very investors and businesses that profited from the economy are now distancing themselves from it.
The cedi, which was stable between 2010 and 2013 has depreciated drastically, losing about 30 per cent of its value to the US Dollar.
Inflation has spiked to a current four-year high of 15.3 per cent and cost of credit to businesses has risen as increased public borrowing through treasury bills has pushed interest rates to an average of 30 per cent.
Dr Mansharamani, who is the author of 'BOOMBUSTOLOGY: Spotting Financial Bubbles Before They Burst,' said the apparent swift change in events in the economy within the last four years had not been too surprising.
He explained that the first part, which was characterised by rapid growth and higher returns on investments, represented a financial bubble that was waiting to burst.
"It is obvious some of the things were not sustainable and that is what happened in the case of Ghana. In everything, one of the key areas that must engage us is identifying the difference between sustainable and unsustainable financial trends," he said, explaining that it was often advisable to use good times to test the resilience of a company to withstand harsh economic times. GB