2013 state of Ghana’s business and economy

President John Mahama at his inaugural address earlier in the year 2013 said he wanted Ghana to be a place where economic opportunities are available to all citizens.

He promised to give off his best and ensure his actions make a positive difference in the lives of Ghanaians. The President wanted the private sector to be an ally in his quest to grow the economy.

Economist, Deodat Adenutsi told Luv Biz Report the President will be under pressure to deliver on promises, stated that job creation, macroeconomic stability and Ghana’s international relations within the global economy were some areas to engage the attention of the President.

From the service industry to manufacturers, the impact of the power cuts was felt throughout 2013. Manufacturers were most worried as the erratic supply of electricity did not only disrupt production but people had to invest in fuel and maintenance to run their generators.

Fire outbreaks also wrecked havoc to commercial and business activities. The Kumasi Central Market and Suame light industrial area recorded major fire outbreaks, as valuable property worth thousands of cedis is lost in the inferno.

Owners of affected shops were devastated as most of them did not have insurance policies covering their shops.

A team of technical experts from the Netherlands was in the Country to help artisans under the Suame Magazine Industrial Development Organization (SMIDO) in Kumasi to improve their ability to the manufacture of vehicles.

As part of the project, a prototype vehicle – the SMATI Turtle 1 – was built at the Suame magazine and showcased in Ghana and the Netherland.

All eyes will however be on the introduction of the vehicle that uses no fuel, no oil, no water being developed by a Ghanaian innovator, Samuel Ampiah, at Suame magazine.

He will be pushing the frontiers of the current global automobile engineering standards, when he unveils the new vehicle. The SMATI Magnetic A is expected by the first quarter of 2014.

Ghana’s drive to mobilize deposits from the unbanked population and encourage savings faced serious challenges from the activities of unscrupulous microfinance firms.

Some of the microfinance firms collapsed as a result of poor risk and business management. This led to widespread public apathy in depositing funds with microfinance institutions.

Banking expert, Nana Otuo Acheampong advocated the establishment of a Financial Ombudsman in the country to serve the needs of financial consumers.

There was an insurgence in illegal mining activities in 2013. Farmlands were destroyed whilst water bodies and the environment were gravely polluted as a result of illegal mining.

Interest groups devised strategies to get tough to uproot galamseyers.

Ghana’s economic growth slowed in the first two quarters of the year and deep into the third quarter.

Financial and economic analysts anticipated the successful adjudication of Ghana’s electoral dispute would restore business and consumer confidence to speed up recovery of the larger economy.

However, power rationing, coupled with the introduction of new taxes impacted heavily on manufacturing and industrial production.

There was a 20% hike in petroleum prices and transport fares in September and from October utility tariffs went up – 78.9% for electricity and 52% for water.

These were expected to raise the cost of living, against the 17% increase in the National Daily Minimum Wage announced in September.

Labour unions and associations threatened to hit the streets in a demonstration against hikes in utility prices. Their agitations resulted in a downward review of electricity tariff.

Crude oil, Ghana’s second biggest export earner, generated some revenue to sustain the economy, but targets for cocoa sale were unstable and gold lost its shine prices on the international market drop steadily.

There were fears of business collapse, employee redundancy and high unemployment – mining firms took steps to downsize in order to contain the rising cost of production.

Hundreds of mineworkers have lost their jobs in 2013.

Yet, the some foreign investors, including the Australian Trade Commission, saw Ghana as a destination of choice for many of its companies, identifying investments in natural resources, agribusiness and education as the main opportunity areas for investors.

2013 was also rife with the debate of growing and eating genetically modified crops in Ghana. But at year end, scientists at the Crops Research Institute of the CSIR harvested seeds of the first-ever GM crop to be planted in Ghana – the Nitrogen Use Efficient (NUE) rice.

The trails were conducting on confined fields in the Ashanti region.

Interest groups in Ghana’s cocoa production also explored climate smart agricultural practices for farmers to mitigate and cope with the impact of climate change on production.

Going into 2014, interest groups would be watchful for government’s programs to address the rising budget deficit.

Already, the Public Utilities Regulatory Commission (PURC) has hinted of an increase in electricity and water tariffs from January 1, as the Automatic Adjustment Formula (AAF) for review of tariffs kicks in.

Businesses and other economic actors will keenly observe how the 2014 Budget will lead to a productive and prosperous New Year 2014.

Review by Kofi Adu Domfeh