Economic crisis: Companies under GNCCI laying off workers - CEO

The Ghana National Chamber of Commerce and Industry (GNCCI) has revealed that some of its members are laying-off workers due to the high cost of doing business in the country.

According to the Chief Executive Officer of GNCCI, Mark Boadu Aboagye, one of its construction companies has dismissed about 160 workers since the beginning of the year.

He explained that the high inflation and interest rates are depleting the capital of businesses therefore the chamber will continue to engage managers of the economy to fix the situation to avert further consequences.

“The challenges we are facing now as a country are one; depreciation of the currency. The cedi at the beginning of the year was just about Ghc6 now it is running into Ghc10 so if you are a businessman or businesswoman and you have a dollar-denominated loan or you are importing part of your Capital has been depleted. It is gone! So interest rate is going up, inflation is going up, all these things are affecting businesses”

“Just last month we had a meeting with the governor of the Bank of Ghana when he started increasing the policy rate and when the policy rate goes up interest rate goes up. Then we met the Vice President of Ghana Dr Mahamadu Bawumia, and we made it clear to him the challenges that businesses are facing. We went with one of our members. This is a member who is into quarry and construction and he indicated that just from the beginning of the year he had 260 staff but as at the time we met the Vice President he had less than 100 staff because he cannot pay them because businesses are not doing well”. He said this during the inauguration and swearing-in ceremony of new Council Members and Regional Executives in Koforidua.

Mark Boadu Aboagye said business owners are not father Christmas and therefore could not continue to run businesses at a loss.

“Anybody who sets up a business is not a father Christmas. What you want is a profit and also creating value for your shareholders. But in doing that they will employ people so that students that are coming out of the Universities when they need jobs it is the Businesses that absorb them. One record, even though the government is the single largest employer, the government only employs just 6% of the total labour force. The rest of 94% are employed by businesses and the private sector”.

He continued that “if the private sector is not growing the economy will collapse. So it is our responsibility as an association to engage the management of our economy to ensure that the right environment is created for businesses.”

Ghana’s inflation rate increased to 31.7 percent in July, the highest since November 2003, said the Ghana Statistical Service (GSS) Wednesday.

Samuel Anim, the government statistician, said at the monthly press briefing that imported goods have become more expensive, leading to a 33.9 percent rise in the inflation rate for imported goods, compared with 30.9 percent inflation for locally produced items.

Speaking to the media, President of the Chamber Clement Osei Amoako said the high cost of doing business in Ghana is worrying hence urged players in the industry to join the chamber to strongly advocate for an enabling environment to thrive.

The president of GNCCI revealed that the rapid increase in prices of goods and products and the depreciation of the cedi to the dollar has widely affected private businesses significantly reducing profit margins and increase in expenditure which ends up collapsing some private businesses.

He explained further that the sharp increase of the dollar rate this year can partly be attributed to the large importation of goods into the country, therefore, leading to a higher rate of inflation.

“The impact of inflation on some basic needs like food, fuel, transport and utilities should be a wake-up call on all of us as citizens to support the chamber and the government to ameliorate the rapid inflation rate in the country”.

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