The latest Business Barometer report compiled by the Association of Ghana Industries (AGI) indicates that, business confidence index for the first quarter 2018 has dropped to 100.5 from 107.9 recorded in fourth quarter of last year.
The shows that Business confidence has fallen slightly in compared to last year’s figures.
Last year, business confidence picked up marginally to 103.8 points in for Q1, from 101.6 points in Q4 2016.
The Business Barometer Indicator (BBI) is an AGI proprietary tool that measures the level of confidence in the business environment and predicts short-term business trends.
President of the AGI, Dr Yaw Adu Gyamfi, said while the first quarter of 2018 saw a number of positive signs including a good mix of the macroeconomic indicators, the business confidence seemed to be waning.
“Businesses have been under pressure from the high cost of credit, access to credit, delayed payments, particularly our contractors, the high cost of electricity prior to the announcement of the reduction of tariffs by the PURC,” he said.
The AGI wants managers of the economy to institute proactive policies to deal with the key challenges facing Industry.
AGI would want to see that only a private sector-led industrial development with mutual support from public institutions to enforce import regulations will help check huge revenue loses, create sustainable employment and growth of the Ghanaian economy.
AGI further notes that manufacturing which represents a critical mass of the real sector of the economy was becoming less competitive.
It called for enhanced collaboration between the AGI and the Customs Division of the GRA to help check malpractices such as under-invoicing, under-declaration and erroneous description of imports in order to save manufacturing from the threat of collapse.
According to the Association, delays and charging of unofficial fees still persisted, undermining trade facilitation programmes and reforms introduced last year.
The AGI also says duplication of mandates and services by some regulatory bodies at the ports was very worrying. It says the industry cannot bear the cost of such services already being delivered hence recommended the augmentation of existing structures to avoid excessive bureaucracy and undue costs to the businesses.
“The paperless system is a welcome initiative, though it has not fully addressed all the challenges. To this end, AGI appreciates the discussions and institutional collaboration with the GRA and relevant institutions to help check malpractices at the ports,” Dr Adu Gyamfi said.
The AGI while commending the passage of the Ghana International Trade Commission (GITC) said it would want to see the impact of the work of the Commission on cases of consumer protection and unfair trade practices against the local economy.
However, AGI pledged its support for the Commission and had set up a private sector committee to closely monitor the work of the GITC, the AGI President said.
On the One-District-One Factory initiative, the AGI urged Government to expedite action on the initiative, considering the slow pace of implementation, saying businesses were anxious to see a clear support from Government.
The AGI lauded government for the recent reduction in electricity tariffs, saying it had brought some relief to industry and non-residential customers.
“The high cost of electricity has often emerged as the number one difficulty facing businesses and the Association is optimistic the reductions would open up new prospects for businesses and inure to competitiveness as a country.
“The Association is calling for the passage of the local content law for the construction sector.
“AGI recommends a form of credit certificate to offset outstanding statutory payments to local contractors. There is also the need for a legislation to cushion contractors who suffer delayed payments in view of the huge pre-financing costs,” AGI President said.
The Association also called for government’s attention to the development of tourism in Ghana, considering the fact that it was the fourth highest foreign exchange earner in the country.
It called on the government to strictly implement the 15-year tourism development program and also ensure that tourist destinations were well-developed.
The AGI has also challenged the government to establish a state-of-the-art hospitality training institute.