Ghana’s unfavourable macro-economic environment which continues to impact negatively on industry has compelled government to revise the sector’s growth downwards.
Industry will this year grow by a paltry 0.8 per cent from an initial projection of 7.0 per cent according to government’s recent review of the 2016 budget.
The growth of industry dropped from 7.3 per cent in 2013 to 4.6 per cent in 2014 and then revised further downwards to 1.2 per cent in 2015.
Indeed, financial reports of some manufacturing firms in the country point to the firms posting losses this year.
The dwindling fortunes of businesses in Ghana have largely been attributed to the deterioration in the country’s economic situation.
Economists say government’s fiscal indiscipline coupled with a hostile business environment characterized by high taxes and the rolling power crisis are responsible for the current woes of businesses.
According to the financial reports, manufacturing firms are hard hit by the ongoing power outages and high production costs.
For instance, Aluminium smelter, Aluworks Ghana Limited, recorded a loss of GH¢5.4 million at the end of June 2016 while its liabilities grew from GH¢41.4 million in June 2015 to GH¢55.60 million at the end of June 2016.
The Association of Ghana Industries (AGI) has been lamenting the unfavourable business environment in the country which it said had led to Ghana's manufacturing sector dipping to an unprecedented low levels in recent years.
The development, the Association stressed was eroding confidence in the business community.
"The manufacturing sector continues to shrink and Ghana risks losing its industrial base if government policies do not quickly address these challenges to revive the industrial sector," AGI president, James Asare-Adjei warned in a communiqué recently.
Worried over the poor attention given to the growth of industry, the Institute for Fiscal Studies (IFS) recently warned that “with no significant growth projected for agriculture and manufacturing which have the potential to create jobs, the unemployment situation is bound to remain dire.”
The Institute called for the IMF programme to be implemented in tandem with the budget “so as to pay due attention to achieving growth by addressing bottlenecks facing manufacturing and agriculture, including energy constraints, poor infrastructure, high cost of credit, high and multiplicity of taxes, high cost of public services and unfavourable international trade policies.”
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