Professor Peter Quartey has entreated businesses to be more prudent and circumspect in their operations as the cost of living in the country is expected to increase in the coming days because of the spike in transport fares as well as prices of fuel.
The Economist indicated that, businesses must be savvy in how they adjust their prices as it can have a direct bearing on their revenue. This is because according to him, prices of certain commodities when hiked reduce demand for them. As a result, he cautioned businesses to be very careful in passing on cost to consumers to prevent a dent in their revenue.
“You have to gauge your demand carefully, there are some products if you pass on everything to the consumer you are likely to lose revenue” because demand will drop. He added that business must therefore, “gauge carefully how you pass on the cost. You might want to pass some and keep some.”
This action is needful because, to the professor, “From now to December, we are likely to experience some gradual marginal increases in prices and therefore… the cost of production of businesses are going to go up.”
Similarly, he pointed out that manufacturers must “try” to be more “efficient” as the production unit of their operations are also going to be affected by the changing times.
The business community in the country have been hit badly with the outbreak of the coronavirus.
Manufacturers had to divert their attention to certain products to stay afloat.
Several restrictions by the government to curb the outbreak cut through the flesh of other businesses. About the time these restrictions were to be released, the General Manager of Liberty Industries, Kai McCarthy appealed to the government to ease restrictions on drinking bars as the closure of their businesses were threating the folding up of many companies in the beverage industry.
She had made it clear that the companies are finding it difficult to operate as they couldn’t “continue to pay salaries when we are not producing.”
“We have lost thousands of Ghana cedis within the period and though we had already sacked a few workers, we intend to reduce our numbers further if the current situation persists,” she added.
“It will probably take a year or more to bounce back as a business after COVID-19,” she said.
This was not peculiar to the beverage industry as the hospitality and other industries have also suffered dearly.
President of the Ghana Association of Real Estate Developers (GREDA), Mr Patrick Ebo Bonful, early in June, publicly let out that, real estate companies were facing imminent collapse as a result of the virus.
He said at the time that, “It is obvious that some of the companies will go down.”
He emphasized that, “Some of our members have already given up and when they go down, they will go down with substantial bank loans and investments.”
The government, as a result, created the Coronavirus Alleviation Programme to support businesses in the country. There has been mix reactions as to the impact of this initiative by government.
As the cost of living is on the hike, which according to Professor Peter Quartey will affect the operations of businesses, time will reveal the challenges of these companies.
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