AGI Warns Rising Costs Could Push Businesses Out of Ghana
Tsonam Akpeloo, Greater Accra Regional Chairman of AGI
The Association of Ghana Industries (AGI) has expressed concerns over the growing cost of production in Ghana, warning that these escalating expenses may push more businesses to relocate to neighboring countries. This alarm follows a recent increase in utility tariffs, which includes a 3.02% rise in electricity costs and a 1.86% hike in water tariffs, both for the third quarter of 2024.
Read full articleTsonam Akpeloo, Greater Accra Regional Chairman of AGI, highlighted that several businesses are shifting operations outside the country due to the challenging economic climate. Although Ghanaian brands remain visible in local markets, much of their production is now being outsourced or minimized.
"Most of the products we associate with being made in Ghana are no longer being fully produced here. While the brands are still on the shelves, the reality is that production has either been relocated or scaled down significantly," Akpeloo explained during an interview with Citi Business News.
He attributed this trend to the high production costs caused by frequent adjustments in utility tariffs, which create financial strain for businesses. Akpeloo called on the government to move from quarterly utility tariff reviews to annual adjustments. This change, he argued, would give businesses a more predictable environment for planning and managing their operations, potentially preventing further relocation of industries.
“We in the industry believe that quarterly utility price increments are detrimental to businesses. An annual review system would allow us to plan more effectively,” Akpeloo urged.
With industries grappling with tough economic conditions, the AGI continues to advocate for government intervention to ease the financial burden on local manufacturers, hoping to prevent a full-scale exodus of production from Ghana.
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