German companies positive about Ghana’s economic prospects
Majority of companies in Ghana with German and European origin or interests expect the local economy to perform better this year and beyond to make a positive impact on business operations.
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Up to 71 per cent of the companies, which took part in the World Business Outlook 2015 survey, expect the economic trend in the country to get better in the next 12 months.
Although a segment of the businesses (29 per cent) expects the economic trend to remain constant, none of the businesses expect the trend to worsen within the period under review.
This is the first time companies from Ghana have participated in the annual survey conducted among over 2000 respondents in more than 90 countries across the world by the Association of German Chambers of Industry and Commerce (DIHK). A total of 35 companies in Ghana took part in the survey which was coordinated in Ghana by the Delegation of German Industry and Commerce in Ghana (AHK Ghana).
A Delegate of the German Industry and Commerce in Ghana, Mr Patrick Martens, who shared the findings with the Daily Graphic, explained that the level of participation from Ghana was commendable, being the first time by companies involved in bilateral trade. He expressed optimism about increased participation in the next World Business Outlook to take place at the end of the first quarter of 2016.
More business expectations
A little more than half of the respondents expect the health of their companies to remain the same, 32 per cent of them expect better and higher performance, with 15 per cent being pessimistic about their business outlook.
On investments, 42 per cent of the businesses expect an increase in their investments in the next 12 months; 39 per cent expect their investment levels to remain constant, with 18 per cent being bearish about their investment outlook.
The survey also captured 41 per cent of the companies expecting to see their employment levels remaining constant, with 38 per cent expecting to increase their employment levels. This is in tandem with their expectations of a better economic trend in the country.
Risks
When asked to share what would constitute risk for them in the next 12 months, the companies listed financing, exchange rates and prices of energy and natural resources (energy) as the most significant.
According to Mr Martens, each factor was seen as a major risk by more than 50 per cent of the Ghanaian-based participants.
“Economic policy framework was another risk that was mentioned by more than 40 per cent of the participants, while lack of skilled workers exceeded 20 per cent and legal certainty and labour costs exceeded 10 per cent, with demand being named as a risk by less than 10 per cent of the Ghanaian participants,” he explained.
When it came to expectations in the local business development for the next 12 months, the African based company representatives were more positive than participants from any other region. A total of 40.31 per cent of the African participants expect better performance; 41.86 per cent expect things to remain constant, with 17.83 per cent being pessimistic about their business outlook.
On the worldwide scale, 31.34 per cent of the participants expect the local development of their companies to improve, 52.12 per cent expect to remain constant, while 16.53 per cent expect the local development to worsen.
When it comes to investments, 58.3 per cent of the African based participants expected an increase of their company’s investment in the next 12 months. This is higher than in any other part of the world and compares favourably with the second ranked region, North America, which had 50.3 per cent of respondents expecting an increase in their company’s investment. The worldwide equivalent is 45.9 per cent.
Mr Martens said findings of the research on Ghana was a confirmation of the potential in the country and Africa, and that AHK Ghana would continue to support German and Ghanaian companies operating in the country or planning to enter with their market information and knowledge “in order to unlock that potential.”