The challenging business environment in Ghana continues to hamper the prospects of business operators and is compelling them to take decisive actions to save their businesses from collapsing.
About 2,000 workers are likely to lose their jobs by June this year if the business environment does not improve, the Industrial and Commercial Workers Union (ICU)-Ghana has disclosed.
Between January and March 2015, over 500 jobs have been lost due to the worsening economic conditions and deepening energy crisis.
The revelation is based on the official communication the Union said it had received from the over 60 major companies made up of both local and multinationals in the country.
General Secretary of ICU-Ghana, Mr Solomon Kotei says some of the companies are considering a complete shutdown.
“Looking at the sizes of the companies that are having these plans, and the size of ICU itself of over 74,000 work force, it tells us the likely impact of the loss to this country if a number of them lose their jobs,” he said.
The development, he said had to do with massive redundancy because most of the companies concerned had zero to 2,000 workers, zero to 800 workers and more.
Reasons for the imminent massive job losses are not far-fetched, but the current power crises is said to have further compounded an already unfriendly business operating environment.
Businesses have expressed concerns over the invasion of the Ghanaian market with cheap and low quality products that cannot be compared with Ghanaian products.
They have repeatedly called on government to strengthen its trade policies, to save local industries from the threat they face from imported goods.
“Accounts from the Association of Ghana Industries and the Ghana Employers Association point to the fact that businesses are not doing well and they are not doing well because our economy is over liberalized,” Mr Kotei explained.
Mr Kotei referred to the predicament of the textile industry which is almost on its knees due to piracy from overseas.
“All we see around are products coming from Europe offering stiff competition to the local products made in Ghana,” he lamented.
The depreciation of the cedi has had a devastating effect on businesses as it has virtually disabled planning and budgeting.
Many businesses including banks in Ghana say high taxes, electricity bills, rent, water bills and salaries of workers are impacting negatively on their businesses and ability to lend more.
It will be recalled that the Ghana Hotels Association last month revealed that industry players were being forced to cut down workforce due to the high cost of doing business. The Association said staff downsizing may be the only option if the situation doesn't improve.
According to the hotel operators, business is no longer attractive to new investors due to the high bank borrowing rate at 34 per cent with inflation hovering around 16 percent.
“To enable us survive such turbulence, we are forced to increase our rates and prices turning Ghana into a high cost destination.” They said.
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