Cedi depreciation, inflation anticipated by businesses as major challenges in the next 30 days – GSS
Insights from the Fourth Wave of the Ghana Business Tracker Survey indicate that firms anticipate future challenges within the economy.
Per the survey, the top three challenges firms expected to face within the next month (30 days) included the general rise in prices (inflation; 64 percent of firms), high taxes (54 percent), and currency depreciation (45 percent).
The anticipation in the rise of inflation by businesses aligns with a projection by asset management firm, GCB Capital that inflation is expected to rise to 26% in March 2024.
The cedi, having already lost about 7% of its value to the dollar since the beginning of this year and ranked the third weakest currency in Africa by Bloomberg, is also expected to weaken further by currency analysts, thereby validating the concerns of businesses of the currency depreciation leading to increased costs of production.
In addition, dwindling demand and high borrowing costs were also of concern to the firms. The dominant constraints reported were interest rates being too high (51%), followed by an unwillingness by financial institutions to offer financial support.
For large firms, the reduction in sales was the major concern, while for medium-sized firms, the high taxes and high inflation were the major concerns.
The Ghana Business Tracker Survey was conducted between April 29 and July 92023 by the Ghana Statistical Service, in collaboration with the World Bank, the European Union, and the United Nations Development Program.
The survey includes 3157 firms and is the fourth wave of the Business Tracker Survey in Ghana. The third wave was conducted between 1st to 30th September 2021, following up on the second and first rounds conducted between May 26 and June 7, 2020, and August 15 and September 10, 2020, respectively.
The Business Tracker Survey is part of a global Business Pulse Survey (BPS) effort by the World Bank and its partners to measure the impact of the pandemic and subsequent crises on private sector development.
The fourth wave of the Business Tracker Survey was modified to include more information on the impact of the economic and financial situation in Ghana on firms, the use of digital technologies in various business practices, the adoption of green practices and the impacts on firms that have multinational links and those that trade with multinational firms or directly internationally.
