Accra: The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Baidoo-Aboagye, has highlighted that while there have been recent improvements in Ghana's macroeconomic indicators, these have not yet resulted in significant relief for businesses. He attributes this to ongoing structural cost pressures and inherent time-lags within the economy.
According to Ghana Web, Baidoo-Aboagye, in an interview with Business and Financial Times, acknowledged that there have been positive movements in key economic indicators such as inflation, exchange rates, and interest rates in recent months. He noted that the strengthening of the cedi is starting to reduce the cost of imports, requiring businesses to spend fewer cedis to obtain foreign currency, which in turn decreases import duties calculated in cedi equivalents.
However, he emphasized that these macroeconomic gains are not immediately reflected in the real sector. 'There is always a lag. Inflation may be coming down and exchange rates stabilising, but it takes time for these changes to reflect in the cost of doing business,' he explained. Baidoo-Aboagye also pointed out that although lending rates have decreased from previous highs, they remain elevated between 20 and 25 percent-among the highest in the world-posing a significant barrier to business growth.
He further highlighted that the cost of local production is still considerably high, driven by expenses related to utilities, taxes, and financing. In some cases, imported goods are cheaper than those produced locally, despite additional costs like freight and port duties, indicating that production costs in the country remain high. 'Even with improvements in inflation and exchange rates, if utility tariffs and taxes remain high, businesses will not feel the full benefit,' he stated.
The GNCCI CEO urged for ongoing policy efforts to reduce electricity and water tariffs, alleviate the tax burden on businesses, and lower lending costs to help businesses translate macroeconomic gains into better profitability. He acknowledged that the prices of some goods, such as building materials, have begun to decline, but stressed that maintaining these gains is crucial for restoring business confidence. 'If these improvements are sustained, then you will see a real impact on prices. But if they are short-lived, businesses will be reluctant to adjust,' he noted.
Baidoo-Aboagye also cautioned that Ghana's economic outlook remains susceptible to external shocks, particularly global geopolitical developments like tensions in the Middle East, which could lead to increased fuel prices and transport costs. Despite these concerns, he expressed cautious optimism about the economy's trajectory, praising government efforts to stabilize the macroeconomic landscape while underlining the importance of consistency. 'We are seeing positive signs and we acknowledge the progress made. The key issue now is sustainability. If these gains are maintained, businesses will begin to feel the full impact,' he concluded.