Business Confidence Worsens— Survey

Twum-AkwaboahBusiness confidence has worsened sharply, according to the latest Association of Ghana Industries’ (AGI) Business Barometer Survey for the second quarter of 2014.

From an index of 90.13 for the first quarter, business confidence fell sharply to 22.42 in the second quarter, 2014.

Mr. Seth Twum-Akwaboah, the Executive Director AGI said the findings were consistent with current developments in the economy, including the depreciation of the cedi, erratic power supply and the multiplicity of taxes emerged the top three challenges businesses faced in the second quarter.

“These do not come as a surprise. Measures by the Bank of Ghana to control the cedi depreciation against the major trading currencies seemed to have had little impact. Foreign earnings that would have been repatriated are likely still being kept in offshore accounts.”

“As uncertainty lingers over the entire business climate, planning into the future remains a major hurdle for many captains of industry,” he said.

The Business Barometer Indicator is an AGI proprietary tool which measures the level of confidence in the business environment and predicts short-term business trends.

It simply expresses the state of the business climate in one figure (index) with 100 as the base index. It is calculated out of “current” business mood and “expectation” for the future.

The Chief Executive Officers (CEOs) interviewed said they had to contend with more contingency measures, to keep businesses running.

Of the CEOs interviewed, 38 per cent believed the business climate had not changed between Quarter 1 and Quarter 2 of 2014, while a good majority 57 per cent reported of change.

In contrast, seven per cent were optimistic the business climate would improve in the next six months.

“Overall, business outlook is not likely to improve in the next six months according to 93 per cent of the respondents,” Mr Twum-Akwaboah said.

On challenges,the depreciation of the cedi, the unavailability of power supply, multiplicity of taxes and delayed payments ranked the topmost among the respondents. —GNA

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