Industries, businesses suffered severe challenges in 2013, 2014:— GCCI

The Ghana National Chamber of Commerce and Industry (GCCI) has described 2013 and 2014 financial years as moments where industries, businesses and services suffered severe challenges in their operations.

According to the chamber, which is the foremost business association in Ghana, the sectors battled with such issues as high inflation rates, instability of the economy as well as the cedi, high cost of doing business, increasing cost of credit, the government’s excessive borrowing from the domestic market, and above all, the debilitating effect of the Ebola scare on the sub region.

High interest rates

At its 40th annual general meeting (AGM) in Accra yesterday, the President, Mr Seth Adjei-Baah, said high interest rates disrupted the smooth operations of businesses in the country during the two years under review.

Citing a recent World Bank survey, the president indicated that access to affordable credit was a major challenge inhibiting business growth in Ghana.

He also cited the Central Bank’s Policy Rate which was reviewed upward from 16.0 per cent in 2013 to 21.0 per cent in 2014, a situation he said impacted negatively on the businesses and services sectors.

“The 91-day Treasury Bills rate increased from 23.1 per cent in 2013 to 25.8 per cent at the end of December 2014.

“Lending rates in Ghana ranged between 27 and 35 per cent, which were among the highest rates in the world,” he added.

Mr Adjei-Baah averred that the high rates documented in the last two years were partly fuelled by the government’s excessive borrowing from the local market, thereby crowding out the private sector.

Inflation rates

Mr Adjei-Baah said inflation for 2013 stood at 13.5 per cent and rose sharply to 17 per cent in 2014, a situation which he noted, was caused by the depreciation of the local currency against the major foreign currencies as well as the effects of utility and fuel price adjustments.

Whereas the services sector in 2013 and 2014 grew from 49.8 per cent to 51.9 per cent, the industry and agricultural sectors recorded downward movement from 27.8 per cent to 26.6 per cent and 22.4 per cent to 21.5 per cent respectively.

“The manufacturing sub-sector over the same period posted a negative growth of -0.5 per cent and -0.8 per cent in 2013 and 2014 respectively.

“The outbreak of the Ebola epidemic also greatly affected trade, investment and the general economic performance in West African countries including Ghana,” he added

In spite of these challenges, Mr Adjei-Baah said the private sector stood as the major anchor of socio-economic development in the country.

Association’s successes

At the end of 2014, he said the membership of the chamber stood at 3,000 with 1,800 of them, being active members.

He said the chamber organised various fora such as advocacies, engaging business communities through CEOs Breakfast Meetings and other engagements with the government and its agencies.

In 2013, the interest received by the chamber on its operations stood at GH¢75,466 as against the GH¢42,644 recorded in 2012.

Its surplus of income over expenditure, however, dwindled sharply from GH¢107,731 in 2012 to GH¢56,987 in 2013.

The Minister of Foreign Affairs and Regional Integration, Ms Hanna Serwaa Tetteh, advised members of the chamber not to rely only on foreign aids, but find innovative ways to raise funds to support their businesses.