The preparedness of Ghanaian businesses to take advantage of the opportunities presented by the African Continental Free Trade (AfCFTA) continue to hang in the balance, as only 18.5 per cent of respondents surveyed are confident that Ghanaian businesses can take advantage of the deal.
Meanwhile, the rest, either believe it will be tough (23.1%), very tough (6.2%) or were unsure how Ghanaian businesses will fare under the AfCFTA.
To address this problem, the report recommends that dialogues on the AfCFTA should continue to enable businesses understand the needs of businesses regarding their capacity to expand and trade under the AfCFTA.
Other worthwhile recommendations include the fact that attention should be paid to capital access and cost in order to significantly impact on the post-crisis recovery of businesses.
Moreover, the report recommends that businesses look forward to tax measures that will lessen the burden of operational costs so that more investments can be made.
More importantly, the report suggests that the government should continue efforts at reducing corruption and making government-business interfaces more transparent. Ongoing digitisation measures should also be deepened as it may go a long way to achieve this, the report notes.
As a milestone launch on January I, 2021, the AfCFTA has been faced with mixed reactions across the continent, as sentiments have been in criticism over the unpreparedness of African countries as well as the yet to be operable laws under the trade pact. Others have well indicated support for the pact, highlighting the enormous benefits likely to be accrued.
Assessment of the Cost of doing business
The report, organized by the UK-Ghana Chamber of Commerce (UKGCC) assesses the drivers and constraints of businesses in 2020, thus, considering a wide variety of these factors from the perspectives of Ghanaian businesses.
Assessing other dimensions of the climate under which businesses in Ghana operated during the COVID-19 pandemic, the report provides ratings on these factors.
Accordingly, Ghanaian companies were heavily constrained with access to capital, infrastructure and quality of government processes. These were the highest negative ratings assigned compared to the least negative ratings of utilities and telecom facilities.
“The general rating of the business environment components produced mixed results; however the negative ratings were more than the positive ratings,” the report stresses.
Still on the assessment of the cost of doing business, the report indicates that skilled labour emerged as the cheapest of the business environment components.
Not far behind was marketing and selling in the domestic market whose cost was assessed by most businesses as economical or very economical. Accordingly, capital came at the top among the most costly business environment components presenting a two-pronged problem – poor access and high cost.
Similarly, land which was assessed as the second most costly in 2020 also presents other problems especially in urban areas where its acquisition can be very demanding. Following capital and land was machinery as the third most costly.
“Governance issues such as corruption and stability of the political system were some of the cross-cutting issues on which businesses shared their perspectives. The level of corruption was assessed as very high.”
The main highlight of 2020 was the impact of COVID-19 on business operations. The most wide-ranged effects of the pandemic on Ghanaian businesses were decreased revenues, financial challenges, increased cost of production, supply chain challenges and workforce challenges.
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