Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, has expressed concern over Ghana’s diminishing appeal as a favourable business destination in the West African Sub-region.
According to him, the purchasing power of the average Ghanaian has declined over time, leading to reduced patronage of goods and services. This economic trend has contributed to the closure or exit of some small-margin businesses from the Ghanaian market.
Speaking on Joy FM, Badu-Aboagye attributed the rising cost of living in Ghana to these economic conditions, which have resulted in businesses folding up and frequent employee layoffs, worsening the unemployment situation.
According to him, the exit of multinational companies from Ghana is “sending a signal that there’s something fundamentally wrong with the business environment.”
“If you take for instance, Jumia and also Glovo, in a situation as we find ourselves with a high operational cost, high interest rates and the rest, you realized that the companies that will fall quickly and earlier are those with the smallest margin, because their business model depends on the ability of the Ghanaian to purchase a product.”
“If Ghanaians are not buying it means Glovo and Jumia will not be there to distribute. And of course Ghanaians are not buying because sales have gone down, purchasing power has gone down and the businesses that are supposed to make profit to take care of employees are also closing down,” he added.
He therefore noted that Ghana is “gradually losing our position as a favourable investment destination in West Africa.”
In late April, the delivery service platform Glovo announced its intention to cease operations in Ghana from May 10, 2024. Additionally, there were media reports in early May suggesting that French bank Société Générale (SG) Ghana planned to exit the country’s banking sector.
However, at SG-Ghana’s 44th Annual General Meeting in Accra, Managing Director Hakim Ouzzani refuted these reports, stating that they were mere rumors and did not originate from the bank.
Professor Kojo Yankah, founder of the Pan African Heritage Museum (PAHM), has urged support for indigenous businesses following reports of expatriate companies exiting Ghana.
He views the departure of foreign companies as an opportunity for local entrepreneurs.