The Chief Executive Officer of the Association of Ghana Industries, Seth Twum Akwaboah, has revealed that Ghanaian businesses are in danger losing their market if they do not expand.
According to him, the commencement of AfCFTA and the entrance of products from other African countries will collapse indigenous businesses.
To address the problem, the AGI President is therefore calling on indigenous businesses to reposition themselves in the market.
“It is giving us more opportunity in a wider market and there is a risk. The risk is that, if we do not take advantage of it and expand, our market will even be taken away. While you are targeting other markets, others are also targeting your market. And therefore you strategize well and produce at the best competitive price, and then you can export to those markets.”
“As you are getting bigger market you can expand. As you are expanding you are becoming bigger, and… that is when you become large if you grow”.
Ghana’s manufacturing industry
Research and advisory firm confidant in its latest report, assessed “Ghana’s Competitive Potential in the AfCFTA”. As part of the report, it revealed that Ghana’s manufacturing industry is lagging behind in its productive capacity.
In its assessment, it stated that Ghana trails behind eleven frontier economies. This incldes Morocco, Kenya, Egypt and Côte d’Ivoire, amongst others signed on AfCFTA.
Konfidant’s report buttresses World Bank’s take on the country’s rippling manufacturing sector and its impact on the Industry sector. According to data from the World Bank, Ghana’s total productive capacity score out of 10 is 4.75.
“Ghana’s productive capacity compares poorly to many of the leading countries in the AfCFTA”.
The report further suggested that the nation’s failure to provide its firms with the needed raw materials has contributed to giving other countries a competitive edge.
“Ghanaian firms are the second-highest dependents on foreign inputs among the 12 frontier economie [and] Ghanaian firms lose about 17% of annual output to electrical outages compared to the average 10% for frontier competitors.”
Incentivise partner companies
As part of its recommendation, Konfidant urged government to reduce the country’s dependence on foreign input. According to the Research firm, this will help businesses take advantage of the free trade.
It suggested that government should “incentivize and partner companies operating in the same industry or product segments”. These companies, it explained, will co-invest to set up local firms to locally produce the products for them.
Additionally, it advised government to ensure local firms have access to affordable electricity in order for them to take full advantage of the nation’s industrial drive.
“Government must aim at reducing Ghana’s high cost of power to a target of 5 cents per kilowatt-hour (which will still be nearly 100% more expensive than the cost of power in Ethiopia) for strategic industries under the government’s Industrial Transformation Agenda, the Ghana Export Development Strategy and related AfCFTA priority industries”.
Read Also: 2020 National Best Farmer receives GH570,000 prize from ADB
