The Chairman of the Tema wing of the Ghana National Chamber of Commerce and Industry (GNCCI), Mr. Michael Kabutey Caesar, has stated that the government has not provided an enabling environment for the private sector to grow. He asserted that the growth of the private sector influences the decision of private business owners to employ or not to employ.
Mr. Michael Kabutey Caesar indicated that the private sector in Ghana employs the majority of the labor force in Ghana as the government employs between 5% – 10% of the labor force. He emphasized that there are a lot of unemployed people ready to work but the private sector is unable to absorb them because of current economic issues.
“The issue (unemployment) is quite dire. We’ve always heard that the private sector is the engine of growth and then also the government is supposed to facilitate the working enabling environment. If the environment is not that enabling to the private sector which is set up to make profit, then they will decide whether to hire or not”.
Mr. Michael Kabutey Caesar
Furthermore, Mr. Michael Kabutey Caesar specified that the private sector is constrained in managing its internal affairs due to the current inflation rates. He indicated that with the current economic status of the country, there is a likelihood for private employers to decide to downsize their workforce or reduce their pay.
Moreover, he specified that the private sector is on the verge of not making any profits because current economic situations do not create an environment to make any profit. He stressed that the COVID-19 pandemic and the Domestic Debt Exchange Programme (DDEP) affected the private sector abysmally.
Mr. Kabutey Caesar revealed that the private sector is not gaining as much growth as it should as it is currently stagnating. He emphasized that the private sector cannot absorb more into its workforce because it is currently striving to stay afloat. “It is currently in a sustainable mood” he stated.
Private Sector To Experience A Decrease In Investment
Mr. Kabutey Caesar also stated that the private sector aims to expand and grow to be able to spearhead economic growth and increase employment. He stressed that until situations become better, investment in the private sector will remain insignificant as it is high risk to invest in the sector currently.
“But if the factors and the environment are not giving you that comfort…Yes the higher you take the risk the higher, you know, the returns; that’s what the finance people will tell you but if the risks are vast…you will say no this is not the time for me to throw good money out so you just hold on to make sure that I survive the time and when it’s right for growth, I will put it into other investments”.
Mr. Michael Kabutey Caesar
Mr. Kabutey Caesar argued that the private sector cannot continue to hire and pay employees if there is no growth recorded because private enterprises exist to make a profit.
The issue of unemployment has been a major topic of discussion for both public and private entities for some time now. Recent data from the 2023 annual household income and expenditure report disclosed a 14.7% unemployment rate among individuals aged 15-35.
According to the Ghana Statistical Service (GSS), the increase in the unemployment rate of females between the fourth quarter of 2022 and the first quarter of 2023 has climaxed, resulting in a disturbing unemployment gender gap in 2023, compared to 2022.
The report also revealed that the difference in the unemployment rates between urban and rural areas broadened consecutively for the first three quarters of 2023.
Meanwhile, the Ghana National Chamber of Commerce and Industry (GNCCI) has urged the government to offer incentives to businesses in light of a deteriorating unemployment crisis. The GNCCI, also suggested that the government should establish a financially conducive environment for the private sector to absorb the unemployed youth.
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