For a country that has always found comfort in priding itself as the gateway to Africa, it is rather unsettling to learn that some indigenous businesses, fed up with the hostile operating environment are now looking beyond the country’s shores.
Ghana has been the destination of investments for a long while, attributable to political stability, however it appears other considerations beyond political stability such as the increasing cost of doing business fuelled by high taxes, corruption, power crisis, high cost of credit are determining the decisions of businesses.
Some locally owned businesses say they are planning to relocate part of their enterprises to Ivory Coast where there is constant supply of power, a more stable currency and there exists a friendlier climate.
It will be recalled that in February this year, this paper’s interactions with some investors revealed utter desperation over the power crisis and its effect on their businesses and threatened to relocate to other countries if the situation remained unchanged.
The driver of every economy is energy which contributes immensely to a country’s gross domestic product. If a country lacks adequate supply of energy, its overall development is bound to lag behind. This is so because industry, services and even agriculture all depend on energy.
Investor decisions are largely based on reliable electricity supply, market potential, access to finance, good infrastructure and fair regulatory and legal regime.
Some energy experts warned that some industries were bound to shut down and possibly relocate to neighbouring countries and “Ghana will no doubt lose that competitive edge to countries are doing better as far as energy supply is concerned.”
“If a country like Ivory Coast has all the energy to operate at full capacity then economies of scale dictates that the more you produce, the more your costs of production will come down and that becomes a competitive platform where people will see your neighbours as doing well in terms of what is driving the economy,” says Director of Policy and Research at Africa Centre for Energy Policy (ACEP), Mr Peter Amewu.
Ghana, until a few years ago, one of West Africa’s economic success stories slipped from 111th out of 144 to 119th, out of 140 countries across the world, in the 2015 – 2016 Global Competitiveness Rankings of the World Economic Forum.
The World Bank’s ‘Doing Business 2016’ report further disclosed that Ghana dropped from 112 to 114 on the ease of doing business rankings.
The Bank indicated within the same report that the cost of starting a business in Ghana had increased by 70 per cent in three years.
“Ghana made starting a business more difficult by requiring entrepreneurs to obtain a tax identification number prior to company incorporation,” the report said, in reference to some reforms undertaken by government in 2014.
Source: The Finder