The President of the Ghana Union of Traders Association (GUTA), Joseph Obeng, has disclosed that many businesses in the country have been struggling to break even since the last quarter of 2022.
According to him, inflation and the depreciation of the cedi that characterised the last months of 2022 made businesses lose more than half of their capital.
Mr Obeng stated that “most businesses are unable even to import the volumes that we used to import. That’s why even the port is dry. If your capital is $100,000 and has been depleted by 50%, now you can only change, by the depreciation, only $50,000. So can you bring the same quantity of goods now?” he quizzed.
“The last few months of 2022 have seen businesses suffering too much. We are suffocating. If you look at the last quarter of 2022, that’s where the exchange rate, the depreciation of the cedi, reached its peak, and so most of our capital got depleted, over 50%,” he stressed.
Mr Obeng indicated that even though the cedi has appreciated in the past few months of 2023, businesses are still “overburdened” by taxes, and the cost of doing business is also high, affecting their operations.
“The inflation we experienced about 53% was tied to the exchange rate, the depreciation last year. And so if the exchange rate is being stabilised, then it is expected that inflation will follow suit. Why is inflation not coming down? Inflation is not coming down because even the Bank of Ghana keeps increasing the monetary policy rate, which is not the solution.”
He contends decisions like increases in policy rates also compound the cost of doing business.