Business confidence rising – AGI survey

Business confidence as measured by the Business Barometer Indicator (BBI) of the Association of Ghana Industries (AGI), has shown a rebound in the second quarter of 2019, reflecting improved sentiments of the business sector compared with the previous quarter.

The Business Barometer Indicator recorded rising confidence as measured by its index which rose from 99.8 in first quarter to 103.2 points for the second quarter of 2019.

The Business Barometer Indicator (BBI) measures the level of confidence in the business environment and predicts short-term business trends, based on the business community’s assessment of current economic conditions and perceptions of the business climate.

At a press briefing in Accra on Wednesday, the Chief Executive Officer (CEO) of the Association, Mr. Seth Twum Akwaboah explained that the reason for the improvement in the sentiments of businesses has largely been to the enhanced macroeconomic stability in the country.

“For instance, the inflation has consistently been dropping, whereas the policy rate of the central bank has also been maintained. Moreover, the cedi did not record a significant depreciation during the second quarter,” Mr. Akwaboah noted.

However, industry pointed out five keys challenges that were encountered during the second quarter including the high cost of electricity as the leading impediment, along with high cost of raw materials, cedi depreciation, and delayed payments in relation to the construction sector.

During the first quarter, the depreciation of the cedi was the leading impediment, followed by the high cost of electricity and high cost of raw materials.

Going into the second half of 2019, the Association points out that high cost of raw materials and electricity, as well as the current tax regime, remain major constraints to growth of local industry.

However, in contrast, business confidence as measured by the index derived from the Bank of Ghana’s (BoG) Business Confidence Survey for June 2019 showed marginally dampening sentiments in the confidence of the business sector.

The central bank’s own business sector confidence index slowed to 94.1 percent, following a recovery in the survey conducted in March 2019 to 94.3 percent.