Business environment remains challenging – Deputy BoG Governor
A Second Deputy Governor of the Bank of Ghana, Elsie Awadzi-Addo, has averred that Ghana’s business environment remains challenging with significant uncertainty in its economic outlook on the back of the COVID-19 pandemic.
This, according to the Second Deputy Governor, is in spite of the significant pick-up in economic activities since the beginning of this year.
Making the assertion during the virtual media launch of the 4th Institute of Directors-Ghana (IoD-Gh) Corporate Excellence Awards, Mrs Awadzi-Addo said, “The theme for this year’s awards ceremony is a call to action for a national dialogue on the role of good corporate governance in our efforts to have the economy bounce back fully after the effects of COVID.”
“Economic activities have picked up significantly since the beginning of this year, but however the business environment remains very challenging with significant uncertainty in the economic outlook given the changing dynamics of the pandemic.”
“The ability of businesses to be competitive in the new normal will hinge strongly on good corporate governance, as it will ensure that businesses are run and governed in a way that harness the scarce resources available to them to create lasting value for all their stakeholders on a sustainable basis,” she added.
The Bank of Ghana’s Composite Index of Economic Activity (CIEA) which measures changes in economic activities as at the end of March 2021, recorded a 26.8 percent year-on-year growth indicating a strong pick-up in economic activities and the gradual recovery of the economy from the Covid-19 pandemic.
The record growth in the CIEA, the Central Bank noted, is a rebound from the 1.9 percent contraction recorded same period last year.
On a quarter-on-quarter basis, the CIEA recorded a 14.4 percentage points growth from 12.4 percent in February 2021 to 26.8 percent in March 2021.
Key drivers of economic activities for the period under review according to the Central Bank were domestic consumption (proxied by VAT collection), construction activities, international trading activities, resumption of industrial production activities and air-passenger arrivals into the country.
Despite the recorded growth in the CIEA, the BoG’s confidence surveys conducted in April 2021, showed a decline in both consumer and business sentiments.
According to the Central Bank, consumer confidence dipped slightly on account of increases in petroleum prices at the pump, new taxes, and transportation fares.
In a similar direction, the optimism of businesses also declined or softened on concerns that the imposition of new taxes as announced in the 2021 Budget statement would adversely impact operational costs in the short-term.
The Governor of the Central Bank, Dr Ernest Addison, has however averred that softened or dampened consumer and business confidence sentiments due to the pandemic, is temporary and expected to improve in the near-term.