Ghanaian Business Optimism Plummets: A Look at the Africa Trade Barometer Report
Perspective Piece: Business Optimism Remains Largely Depleted
The Financial Climate Chills
Optimism among Ghanaian businesses is nursing a chilly streak, and it ain't looking good when compared to six months ago, as per the Africa Trade Barometer (ATB) report by Standard Bank Africa.
The primary culprit? Inflated product prices and the view that the Ghanaian economy, tied to the struggling cedi, is underperforming.
Government Support Slips
But there's more to this economic chill. The perception of government support for trade has taken a nose dive too.
The report states that Ghanaian firms have witnessed a significant drop in business confidence due to economic performance issues.
Business Fortune: Riding a Rollercoaster
Here's the gist: as businesses believe the economy is headed south, their optimism dwindles. On the flip side, those who think the economy's stable tend to be more hopeful.
Currencies in Crisis
Adding fuel to the fire, Ghana's currency plummeted in the latter half of 2022, making it one of the worst-performing globally.
Yet, the oil and gas sector's strength doesn't seem to trickle down to help other sectors. Nevertheless, the prospect of an IMF bailout in 2023, promising stability and economic discipline, might give businesses a hint of hope.
Export Ambitions, Import Worries
While there's a sliver of optimism about future export prospects, the story's different for imports: Ghanaian firms are less optimistic.
High import/export taxes and a belief that foreign trading is a headache contribute to this pessimism. The report also highlights a desire for tax relief on business taxes, lower customs duties, and easier access to credit to stimulate the local economy.
The ATB: A Light in the Dark
The Africa Trade Barometer report shines a light on the African business landscape, offering reliable data and insights for businesses, entrepreneurs, students, governments, NGOs, and investors exploring the continent.
And More Insights
Let's peer a bit deeper: according to general economic trends, many African countries are experiencing a negative outlook, with citizens viewing their countries' trajectory as unfavorable, and economic conditions worsening[2]. This growing pessimism might be dragging down business optimism.
Market fluctuations in Ghana have also played a part, with the Ghana Stock Exchange (GSE) experiencing declines and investor caution[1], potentially discouraging investment and leading to wariness.
External pressures, such as changes in international policies like USAID suspensions and U.S. tariffs, can create economic shocks for countries reliant on international aid and trade[3], increasing economic hardships and sapping business confidence in countries like Ghana.
To learn more about the specific insights of the Africa Trade Barometer report regarding Ghanaian businesses, it's best to access the report directly or scour for a summary of its findings related to Ghana.
- The Africa Trade Barometer (ATB) report indicates a plummeting optimism among Ghanaian businesses, primarily due to inflation of product prices and the underperformance of the Ghanaian economy, which is tied to the struggling cedi.
- Besides the economic concerns, the perception of government support for trade has also taken a substantial dip, contributing to the decline in business confidence.
- The report suggests that Ghanaian firms seek tax relief on business taxes, lower customs duties, and easier access to credit to stimulate the local economy, citing high import/export taxes and complexities in foreign trading as significant factors in business pessimism.
