Businesses fear worse economic times

Businesses look set to enter the fourth quarter of the year still suffocating under the effects from the wobbling economy as ground evidence offers little sign of hope, Nana Osei-Bonsu, Chief Executive Officer of the Private Enterprises Foundation (PEF) has told the B&FT.

In an interview on the outlook for business as the last quarter draws closer, he indicated: “We can only talk on evidence; and so far the evidence on the ground points to the same scenario. The cedi is still volatile, just as inflation and interest rates remain on the high; nothing much has changed”.

A persistent on-off power situation coupled with an unstable currency and other economic challenges continue to erode the confidence of businesses in the country, thereby stifling investments and productivity in the sector.

The AGI Business Barometer, which collates the views of business chieftains in the private sector on their expectations of the business environment over specified periods, has failed to pass the 100-point mark.

Per the report, the volatile cedi and lack of access to credit are among the top-five challenges limiting the gains and productivity of the country’s businesses.

According to the PEF boss, little has been done in the interest of the business community as far as these problems are concerned, and the pressure will be felt hard in the fourth quarter when there will be more demand for foreign exchange.

He noted: “If anything, the ability to plan and project accurately is seriously impaired because I cannot confidently say that this exchange rate can stay for a duration; nobody can confidently say that the borrowings are going to be stemmed and austerity is not going to step in.

“The exchange rate for the dollar has increased, so depreciation has deepened and we are entering the period when there will be more demand for foreign exchange. So can we withstand the test and make available the demand for excess capacities of foreign exchange.”

Nana Osei-Bonsu said the situation demands prudent and prioritised resource allocation to crtical sectors that will impact the private sector.

“Are we reducing our borrowings? No! Government is planning to borrow another US$1.5billion. Is that going to be used to service debts, or it will be given to support businesses in need.

“Going into the fourth quarter, we cannot say that based on evidence things will be cool because we have not seen much. Unless we can see something, we cannot project confidently,” he said.