Accra: The Vice President of the Ghana Union of Traders Association (GUTA), Joseph Paddy, has issued a warning that escalating business costs in Ghana are driving some companies to either scale down their production or relocate to neighboring countries. He highlighted that Ghana stands out as one of the most costly regions to operate within the sub-region, which impacts the competitiveness of locally produced goods compared to imported ones.
According to Ghana Web, Paddy emphasized during an interview on JoyNews that traders frequently find importing goods more economical than sourcing them locally, even after factoring in import duties. He pointed out that high costs, particularly for electricity, water, and financing, continue to challenge local producers, thereby reducing their ability to meet market demand.
Paddy noted that some businesses have transitioned from production to trading, while others have completely moved their operations. He identified Ivory Coast as a favored destination due to its significantly lower production costs. In Ghana, production costs can range from 30% to 35%, whereas in countries like Ivory Coast, they are between 3% and 7%.
He warned that this trend could severely impact job creation as factories either downsize or close entirely. Citing an example, he described a local manufacturer who ceased production due to high electricity costs and resorted to importing, which resulted in job losses.
The GUTA Vice President underscored that this situation exposes deeper structural issues within Ghana's production environment. He called on the government to implement policies aimed at reducing business costs and bolstering local industries. 'Every business grows on policy. One good policy can help a business grow,' he stated.