Economic environment not supportive of growth of the private sector, says Prof Gatsi
Dean of the University of Cape Coast School of Business, Professor John Gatsi, has remarked that Ghana’s economic environment is hostile to businesses – both foreign and indigenous businesses.
According to Prof. Gatsi, the country‘s economic environment has not been supportive of the growth of businesses given the high rate of interest on loans, the high taxation regime, high inflation rates, and a depreciating cedi.
“We need to deal with the depreciation of the cedi, the high-interest rate, the high tax environment, and inflation to smoothen the economic environment and incentivize businesses to operate and grow,” he quipped.
“This will motivate multinationals and indigenous businesses to invest more in the country,” he added.
Making the assertion during the NorvanReports and Economic Governance Platform (EGP) X Space Discussion on the topic “Navigating The Business Environment in Ghana: Why Are Businesses Folding Up?”, Prof Gatsi quipped persistent depreciation of the local currency has eroded the capital of businesses as well as the purchasing power of Ghanaians.
“Ghana’s economic environment has been extremely hostile to businesses, the enabling environment needed to support the growth of businesses has not been created.
“Depreciation of the cedi for instance has weakened the purchasing power of Ghanaians to demand for goods and services as well as the erosion of the capital of businesses,” he quipped.
Speaking further, Prof Gatsi averred that weak leadership and corruption are among the factors contributing to the inability of the country to create an enabling economic environment for businesses.
“Ghana, and to a large extent Africa, is suffering from a leadership deficit and so is unable to create the environment that helps the economy and businesses to thrive,” he remarked.
“The fight against corruption is also weak, entrenched corruption also contributes to making the economic environment unconducive for businesses,” he added.
Ghana’s economy has been hit by the exit of several multinational companies (MNCs) in recent years, including Glovo, Nivea, Jumia Foods, Lipton Tea, Dark and Lovely, Bet 365, Game, and Bic.
The exit of MNCs can have significant impacts on the economy, including job losses, decreased economic activity, reduced competition and innovation, decreased availability of products and services, increased prices for consumers, and struggles for local businesses to fill the gap.
Moreover, the exit of MNCs can also lead to a decrease in foreign investment, which can further exacerbate the economic challenges facing the country.
