The CEO of the Ghana National Chamber of Commerce and Industry (GNCCI) has cautioned government following the launch of the opposition NDC’s flagship 24-Hour Economy policy.
Mark Badu-Aboagye stated that “no one buys products just because it’s from a 24-hour economy.”
Speaking on PM Express on JoyNews, he was emphatic that without addressing the deeper structural constraints facing Ghanaian businesses, the 24-Hour Economy concept may not deliver the transformation it promises.
“Launching a 24-hour economy will not change the harsh business environment that we are facing now,” he said.
“The first point for me is to look at how we can improve the business, talking about a harsh business environment.”
Host Kofi Agyei pointed out signs of macroeconomic stability, including over 30% cedi appreciation, inflation down to 13.7%, rising reserves, and improving business confidence.
But the Chamber CEO was unimpressed.
“It is a good start, but it’s not enough,” he said. “Having inflation down to 13.7% is a necessary condition, but not sufficient to change the structure of the economy.
“We want to see how lower inflation will reduce the cost of credit. We want to see how the lower inflation will reduce the cost of utility, electricity and water. These are key components when it comes to manufacturing.”
[embedded content]He pointed to the crushing burden of utility costs for businesses in the country.
“In Ghana, the cost per kilowatt hour per manufacturing company, ranging from 12 to 15 [cents], is among the highest. In other countries, it’s less than five cents.”
Equally concerning, he said, was the high cost of borrowing.
“If you have a policy rate of 28%, of course, your interest rate will be around 30% and over. No company would want to manufacture and export and be competitive under this condition.”
Mr Badu-Aboagye questioned the viability of using a 24-hour economy model primarily for domestic consumption.
“If it’s for local consumption, then we don’t need 24-hour economy, because we can produce much to feed ourselves,” he stated.
“We want to export. That is why the accelerated export is a component of the 24-hour economy.”
But he warned that global markets would not be kind to overpriced, uncompetitive goods, no matter how long Ghanaian factories operate.
“When you send your product abroad, people will not buy it because it’s coming from Ghana, because you have launched a 24-hour economy, hm?” he asked.
“You will buy your product because one, it’s competitive, yeah, two, it’s of high quality.”
He pointed out that Ghanaian manufacturers would be going head-to-head with producers across the African continent under AfCFTA, many of whom enjoy far lower production costs.
“So you produce and you send it there, and you won’t get people to buy because it’s very expensive.”
For Mr Badu-Aboagye, the way forward is to translate macroeconomic gains, like lower inflation and cedi appreciation, into reduced interest rates and cheaper utilities.
“Let’s look at how the improvements we are seeing now, the lower inflation and the cedi appreciation, will impact on the policy rate.”
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