The head of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng, has voiced deep concerns over the exorbitant expenses faced by businesses in Ghana.
Dr. Obeng highlighted the escalating costs of operations, which have compelled traders to hike prices for goods and services.
Joseph Obeng expressed in an interview that “the harsh economic conditions are weighing heavily on us.”
He emphasized that businesses, in order to cope with the challenges posed by the drastic depreciation of the Cedi, have had no choice but to transfer the burdens to consumers.
He disclosed that retailers are struggling to secure supplies on credit due to the adverse effects of the Cedi’s depreciation. “I empathize greatly with retailers; they are no longer able to obtain supplies on credit,” he remarked, underscoring the grim reality faced by businesses.
Furthermore, Dr. Mark Badu-Aboagye, CEO of the Chamber of Commerce, echoed similar sentiments, denouncing the alarming depreciation of the Cedi against major trading currencies. He emphasized that the current economic climate is severely detrimental to businesses in Ghana.
Amidst the ongoing depreciation of the Cedi, the Ghanaian currency is witnessing an unprecedented weakening trend. According to Bloomberg, the Cedi has not appreciated against the dollar in the past 22 trading sessions, marking the longest downward trend since 1994. This year alone, the Cedi has depreciated by 14%, outpacing other currencies except those deliberately devalued.
The decline in cocoa earnings, exacerbated by adverse weather conditions and supply shortages, has further exacerbated the situation. Despite a brief surplus in 2023, Ghana’s historical current account deficit is reemerging, posing additional challenges to the Cedi’s stability.
In response to the Cedi’s poor performance, Kojo Yankah, a Minister of State during the Rawlings administration, has urged the government to prioritize incentivizing businesses rather than imposing additional taxes.
Yankah argued that imposing taxes amid the Cedi’s decline would only suffocate the business community further.
