The CEO of the Association of Ghana Industries, Seth Twum Akwaboah has admonished industries in the country to prioritize survival over profitability during the turbulent covid-19 season.
“In this difficult times all you have to do is survive. It’s more about survival, not profit making. So if you can do anything to reduce expenditure and survive, that is fine.” Mr Akwaboah said on PM Express.
He revealed that significant adjustments were made by members of the sector which in some instances led to increased expenditure against reduced demand. He admitted to a 30% downscale in the size of industry workers and said there were studies being undertaken by the industry to determine the specific number of workers who lost their jobs as a result of the pandemic.
Mr Akwaboah disclosed that the association advocated for stimulus packages to help members of the sector who needed “some release”. He confirmed that there had been “series of discussions” with the government which partly resulted in government’s decision to come up with stimulus packages to support the “very micro enterprises”. He added that, further engagements led to a proposal in the midterm budget review by government to provide a guarantee scale of about 2billion cedis to support medium scale industries.
“What was happening was that working capital was really under scale, so we really needed to push and stimulate these companies to produce and keep the workers and also stimulate the economic dynamics…Manufacturing is really tough so in situations like this, we really needed to cushion them to survive.”
Seth Twum Akwaboah also admitted that the industry, particular manufacturing, was already facing challenges prior to the covid-19 pandemic. The pandemic however amplified the situation and various restrictions have led to a “decline in demand for a lot of goods and services.”
“When you take the beverage industry for example…The reality is that the middle class or the average person uses more sachet water than bottled water at home. It is the big conferences, the big event, the funeral, the weddings, and the big party, that’s where the bottled water for example is served. So when you have all this restrictions and all this events are not taking place, then demand for it goes down.”
He added that the breweries are facing the same challenge due to bar closures and the various restrictions on event organization. This coupled with a change in the lifestyle of people due to the pandemic has seen to decline in demand.
“In difficult situations, People control their expenditure as well. They only think about the basic necessities; food, medicine, basic things…Bear in mind that as industries are downscaling and businesses are going down, purchasing power also goes down because workers are having challenges getting the right income.”
Mr Akwaboah also acknowledged that the Small and Medium scale Enterprises (SME’s) in the industry found it harder to cope with the pandemic.
“Most of our members are SME’S and their adjustments to pressure and emergency situations are always difficult…Relatively bigger companies are doing reasonably well”
The CEO of the Association of Ghana Industries, Seth Twum Akwaboah called on industries to make strategic decisions to shore up industrial output, in order to take advantage of the Africa market with the inception of the Continental Free Trade Area (CFTA) in January next year.
He said the 1D1F is bringing up a lot of factories which will put the country in good position when exporting to other countries but condemned the elimination of import duties on some products like sanitary pads, which he said was a disadvantage to industries in Ghana producing same goods.
