Business Barometer Index shows business confidence has risen
The Business Barometer Index (BBI) of the Association of Ghana Industries (AGI) shows that for the second quarter of the year 2017, business confidence has risen.
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Statistics and empirical data indicate that the BBI for the second quarter of 2017 stands at 109.2, while that of the first quarter was 103.8.
The BBI is a statistical means of current situations and expectations that measures experiences and outlook of businesses in the country on key business indicators.
The President of the AGI, Mr James Asare-Adjei, who made this known at a press conference during which the BBI was launched in Accra last Tuesday, noted that the BBI was relied on by various institutions and organisations.
He said the country’s missions abroad also keenly relied on it and made frantic enquiries if there were any delays in its publication.
According to Mr Asare-Adjei, at the beginning of the year, business confidence rose and had continued into the second quarter.
Findings
Presenting the findings, the Chief Executive Officer (CEO) of the AGI, Mr Seth Twum-Akwaboah, said a sample size of about 461 was used in the study.
He said the overall business performance for the second quarter showed that more than half of businesses (73 per cent) had high expectations of a good business environment in the future with the measures taken by the government.
About half of them (46 per cent) were confident in the current business climate, (as at the time the study was undertaken at the reading of the 2017 budget).
From the findings, Mr Twum-Akwaboah mentioned the high cost of electricity, cost of credit, access to credit, depreciation of the cedi and the exchange rates, as well as unfair competition from imports as the main challenges encountered by businesses.
He maintained that generally, the message was that businesses could invest and Ghanaians could do business as the macroeconomic indicators were right with the drops in interest rates, policy rates and a host of economic and social policies geared towards getting the economic fundamentals right.
Challenges
Highlighting key business challenges in the 2017 BBI second quarter, Mr Asare-Adjei called for the reversal of tariff regimes in the energy sector in Ghana, where industries pay more than residential consumers.
He reiterated the commitment of the AGI to work with the Energy Ministry and the Public Utilities Regulatory Commission (PURC) to find a solution to energy pricing for industries in the country.
“At a tariff level of 19 cents per kilowatt hour, it is important to re-examine the current utility pricing and tax regime, if the government is to chart a complete path for industry,” he said.
While lauding the government for planning to cede 51 per cent of the concessionary arrangement in the power sector for local participation, Mr Asare-Adjei urged them to intensify dialogue with industry on the composition of the 51 per cent local participation.
On the cost of credit for businesses, the President of the AGI said although for the third time running the policy rate saw another reduction from 22.5 per cent to 21 per cent, the cost and access to medium to long-term credit still remained major bottlenecks to businesses.
He said lending rates were still high, adding that it was obvious that the declining policy rate had not benefited borrowers.
He, therefore, urged the government to work through the Bank of Ghana to let the lower policy rates reflect in the cost of doing business.
Mr Asare-Adjei also called on the government to expedite action on easing port clearance procedures under the Single Window System in line with best practices.
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