High electricity tariff identified as major threat to business growth

Businesses in the country are optimistic about the first quarter of the year because of the proposed initiatives by government to improve the business environment.

This is contained in the Business Barometer (BB) report released by the Association of Ghana Industries (AGI).

The report also cites the high cost of electricity as major challenge to the growth of businesses in the fourth quarter of 2016 followed by a high number of taxes and delayed in payments of projects.

Addressing the media, AGI President, James Asare Adjei therefore called on the government to as a matter of urgency reduce or scrap some taxes.

Business confidence is beginning to rise, from 99.0 in Q3 to 101.6 points in Q4, 2016.

The issue of high electricity tariff is still the number one challenge for businesses and it cuts across almost all the regions.

“Businesses are still under pressure from multiplicity of taxes for the second quarter running. About 10 percent more of employers in the previous quarter are likely to hire more within the next 6 months” the report stated.

The BB expresses the state of the business confidence as an index, with 100 as the base index calculated out of “current” business mood and “expectations” for the future.

This simple “balance method” is applied by many Business Climate Indicators.

The AGI Council further called on the government to expedite action on the operationalisation of the Ghana EXIM Bank to address the medium to long term financing needs of businesses operating in the export sector.