In a discussion on the current state of Ghana’s business environment, Dr. Humphrey Ayim Darke, President of the Association of Ghana Industries (AGI), has analyzed the cedi’s performance, and the challenges industries face ahead of the December Elections.

Touching on issues such as exchange rate volatility, policy interventions, and macroeconomic stability, Dr. Darke highlighted the interplay of these factors in shaping business confidence and sustainability.

Dr. Darke distilled key observations that are vital for policymakers, businesses, and stakeholders aiming to navigate Ghana’s economic landscape.

Dr. Darke began by describing 2024 as a year marked by relative stability in Ghana’s industrial sector. He emphasized;

“If you do the year-on-year analysis, you see it moved from 2.5% to 6.9% as of the second quarter growth. And as you trace a number of the indices, including the exchange rate or the rate of depreciation over the period, one could suggest that there has been relative stability and confidence level in the economy and in the business community.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

He highlighted that the signing of Ghana’s IMF program also bolstered confidence. According to Dr. Darke, the program and the Monetary Policy Committee (MPC) reports demonstrating significant reserves at the Bank of Ghana have contributed to optimism among businesses.

He also credited innovative measures, such as gold trading, for further enhancing the stability seen in recent months. However, he stated;

“It’s not in doubt that there are still vulnerabilities within the structure of the economy that we could discuss. [But for instance], we could look at the debt position of the IPPs, we could look at the Debt position of the country, the debt restructuring [policy] that defers the debt restructuring to next year. Those are the vulnerabilities that we would look [at] and try to gauge the expectation of the incoming year.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

He highlighted what could lead to significant implications for industrial operations and broader economic stability. He emphasized;

“The independent power producers can pull the plugs, and that derails your power position, and that could give you significant challenges. [These] are part of the vulnerabilities within the system.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

When asked if there is a level of certainty in industries currently, Dr. Darke acknowledged some improvements compared to previous quarters. He answered;

“Yes, you could say that to some extent. However, the vulnerabilities that could trigger or derail these macro gains are still real. That is why I in tune with the subject matter of the debt position of the economy of the country and the IPPS in particular.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

However, he cautioned that certain risks, particularly related to exchange rate volatility, remain a major concern.

He emphasized that the bi-weekly exchange rate policy, especially at Ghana’s ports, was flagged posing a significant challenge to cost predictability. He lamented;

“We keep saying, it triggers in the cost of doing business every two weeks. It goes to the extent of ballooning the debt of the country and automatically derails the macro gains that the economy attained.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

The Impact of Exchange Rate Volatility

Dr. Darke identified exchange rate fluctuations as the “big elephant in the room,” noting their far-reaching impact on the cost of doing business.

Moreover, he called for a review of policies such as the Ghana Revenue Authority Act 891 and the Bank of Ghana’s rate-fixing mechanisms.

“These are part of the vulnerabilities and the concerns of predictability in terms of the exchange rate- the exchange rate runs through everything from the farm gate to the consumer.”
Dr. Humphrey Ayim Darke President of the Association of Ghana Industries (AGI)

Dr. Darke concluded by urging policymakers, especially the two major political parties, to prioritize addressing these vulnerabilities as Ghana approaches another election year.

He emphasized that the two major parties are coming and seeking to address these vulnerabilities. However, He asked, how they intend to deal with the exchange rate factor, the debt position of IPPs, and other systemic challenges.

This is because, to him, industries sustained progress will depend on the government’s ability to balance short-term gains with long-term structural reforms.

Dr. Humphrey Ayim Darke’s perspective is a balanced assessment of Ghana’s economic progress and the persistent hurdles faced by industries.

His emphasis is a clarion call for policymakers and stakeholders to adopt a forward-looking approach to ensure a sustainable and predictable business environment in Ghana.