By: Godwyll An-Baangzu, UDS, Tamale
Businesses In Ghana are facing various challenges that could possibly be described as crises. The foundation of our business crisis is to a large extent complicated by the sort of environment we find ourselves in and actions of political decisions which invariably dislocate every projection. It is said that a tenant cannot cross the leg of the landlord to his bedroom.
The concerns of businesses are stirred whenever fuel prices are touched. We have over the years preached the sermon of the private sector being the engine of growth. But to what extent have our economic policies helped this engine to propel the sort of growth it is expected to build? Need we talk about the recent clampdown on some private sector businesses, which have all collapsed with consequential ramifications? The important role and position of private businesses in our economic mix was tested recently when shops and other outlets closed their operations for less than a week. The hue and cry and dislocations that these actions caused are etched in our memory. Nay, it should be said, that these retail shops constitute only a minute, but an important segment of all private sector businesses. These actions were direct reactions to political decisions that have thrown out of the market a number of private enterprises.
Financial institutions that are one of the most important partners of business in any economy have been equally wrecked by policies that can be described as unfriendly and not forward-looking. Truth be told, the good spirit of doing business in Ghana in recent days, have all melted away, leading to business flight, dislocations and relocations to favourable environments. We need a holistic, nonpartisan, but nationally crafted industrial and economic blueprint that can propel the country away from the near century-old inherited Guggisberg economic vision. Is this country lacking Economic Visionaries? Where are the Experts we have touted over all this time? Many countries that lacked such expertise during the crafting of their economic visions did the wise thing by importing such experts. The world is not closed on us not to go globe-hunting for ideas to get out of this cyclical economic quagmire we always inflict on ourselves. How can we claim to be growing businesses when it is so expensive to borrow and contract loans with Inflation hovering at 40.4 percent and the spoiler of all calculations – an annoying and merciless fuel price hike that is destabilizing every business and home.
Today, Ghanaians are finding it hard to come to terms with the economic realities. For once, Ghana should adopt pragmatic steps under the leadership of men of selflessness to lead a national dialogue on the way out of our challenges. We know the problems, the causes and how to surmount it. What is left is consensus building across all shades of opinions, creed, allegiances and the pledge to die for mother Ghana. It is regrettable that private businesses are incapacitated and reeling under an economy limping and disoriented. For now, we have decided to go to the IMF to calm down the nerves of the economy. The truth is, our woes are not more of monetary policy, but attitudinal and fiscal indiscipline. Therefore, debt sustainability is key to anchor any form of economy. To overcome this, we need a comprehensive restructuring of both local and external debts. Accordingly, we need the political will to also seal off leaking roofs to take in enough to deliver the promise our leaders made to the people.
Governments must also lead an aggressive agenda to propel the private sector to find their feet. Governments on every opportunity have been encouraging Ghanaian citizens, both home and abroad, on investment opportunities in the country and the need for them to come home to contribute to national development. Now is the time to allow the private sector to find the right environment to propel economic growth. A number of businesses have collapsed for one reason or the other. The apparent manipulation of regulations must give way to a faceless policy drive that knows only business and not strong men. The ever-changing regulations, preferential policies and absence of scientific market research data make the assessment of the private sector, consumer rights, consumer behaviour and consumer needs problematic. Yes, if you want to predict the future, you must create it. After all, business must not be only buying and selling. Government needs to dispassionately tackle the challenges of the Sector and support them to arrest the ever-growing army of unemployment, underdevelopment and infrastructure deficit. Manipulative high taxes, fees and policies make venturing into business in Ghana very difficult, unreliable and frustrating to many.
Businesses in Ghana must thrive and survive. For instance, in 2015, about 13,000 businesses in Ghana were negatively affected by several factors leading to employee lay-offs. Business registration processes have also been identified as negatively affecting the success of businesses on the African continent. In the Democratic Republic of Congo for example, it takes about 155 days to complete a business registration process. In Ghana, a business certificate applicant is often assured of receiving the certificate in two weeks but could follow It up till thy kingdom comes. In Angola, the successful execution of a contract involves 47 procedures and one thousand days to get registered.** Foreign investors participation in African economies is negatively impacted by setbacks.
With a 21 percent policy rate, Ghana is occupying the 4th highest policy rate position globally and 2nd highest in Africa. How can this stimulate private sector growth? No wonder about 90 percent of the continent’s businesses are dominated by menial and retail buying and selling activities.
Admittedly, we have, through policies and regulations, undermined our own private sector disastrously. Unnecessary administrative bottlenecks in business registration and contract execution processes must be eliminated. We have to change this negative culture. Interest on loans should be drastically reviewed downward. The Ministry of Trade and Industry must liaise with the private sector to meet the needs and demands of businesses. Government must do well to urge investors to contribute to the much-needed economic transformation. Whatever be the way, the private sector still remains the engine of growth and must not be allowed to collapse.