By: Fred Yaw Sarpong- Daily Express
The Association of Ghana Industries (AGI), an umbrella body of manufacturing companies in the country has lauded government for the current sustainability of the macro-economic stability of the country.
“We commends Government for the seeming stability in the economy and urges the managers of the economy to do everything possible to sustain and improve on the relative macro-economic stability,” AGI stated.
The association announced this in their 2016 first quarter Business Barometer survey. The full report is yet to be released. However a statement was issued and signed by the President Mr. James Asare-Adjei.
The mother body of manufacturing firms also commended Government’s effort to ensure stability in power supply, relative improvement in the depreciation of the cedi and macro-economic environment have contributed to the sign of recovery of the Ghanaian economy.
Meanwhile, AGI said access to medium to long-term credit facilities still remains a major bottleneck to businesses in the country. According to AGI, businesses are unable to borrow on account of the high cost of credit.
The group mentioned that considering the difficulties that Industry faces in accessing credit from the financial institutions, it will be prudent for the Bank of Ghana (BoG) to accompany monetary policy reviews with some mitigating measures to cushion local manufacturers who need medium to long term funds at affordable lending rates.
The association drew Government’s attention to some key concerns that are weakening business confidence as revealed in the AGI’s Business Barometer survey.
AGI said businesses have been overwhelmed by the multiplicity of taxes coming from Government’s ambitious fiscal policies that continue to stifle growth of the private sector.
“Overburdening taxes on businesses is not the best approach to revenue generation. Rather Government must first step up efforts to block revenue leakages, whilst broadening the tax net as a means of formalizing the large informal sector of the economy,” said the AGI.
The association pointed out that the recent utility tariff increments erode the competitiveness of businesses. “The current structure where Industry subsidizes residential consumers erodes competitiveness of Industry,” it added.
AGI reminded the Public Utility and Regulatory Commission (PURC) of the re-classification of consumer categories and a review of the current electricity tariff structure, so as not to disadvantage Industry.
“Businesses are caught up in a regime of exorbitant utility bills and in some instances over and above the increments announced in December 2015. The energy sector levies embedded in utility tariff increments came as a surprise and indicts the transparency in tariff fixing. It is important to re-examine the current utility pricing and tax regime, if Government is to chart a competitive path for businesses.”
AGI mentioned that they expects the Government to keep its expenditure budgets within limit to avoid over runs especially this year been an election year. “The current budget deficit of 7.1% must be further reduced and the resolve of the Central Bank to ensure zero financing of Government must be strictly adhered to,” AGI stated.
Meanwhile, AGI is urging the leadership of all political parties to help maintain peace before, during and after the general elections in November, in order to consolidate the country’s economic gains and also cautioned political activities about negative utterances that might affect investor confidence.