…With departure of foreign companies
The Chief Executive Officer of McDAN Group of Companies, has asserted that if drastic measures are not put in place, the foreign businesses, will continue to leave Ghana, posing a significant threat to the nation’s economy, warns.
Dr Daniel McKorley, indicated that domestic businesses, would collapse, while foreign-owned companies exit Ghana’s market, due largely to the harsh business environment.
He called for a swift action by primarily addressing the challenges business landscape the multinationals are running from.
The CEO of the Ghana National Chamber of Commerce and Industry (GNCCI), who was speaking on a similar matter, observed that Ghana is gradually losing its position as a favourable destination for doing business in the West African Sub-region.
Mark Badu-Aboagye, had explained that generally, the purchasing power of the ordinary Ghanaian, has dwindled over the years, leading to low patronage of goods and services.
Dr McKorley, had highlighted the importance of having the presence of multinational companies operating in the country.
“It is not going to get any better if we don’t take drastic and dramatic steps. I am an entrepreneur and to scan the environment, we are more concerned today because the foreigners are leaving, it is an alarm but how many local businesses are collapsing every day?” he noted in an interview on Accra-based Joy FM on Thursday.
According to the businessman, Ghana has a “small economy”, thus the country’s overreliance on imports poses a significant challenge to expanding the economy. This, he said, has reduced Ghana to “a dumping ground” for big companies.
He also lamented over the current tax regime, which suffocates local businesses. Mr. McKorley urged the government to implement proper tax policies that are business-friendly to allow businesses to thrive.
“We have a very small economy and we are being turned gradually over the years as dumping ground and we are becoming more of a consuming nation. We are not producing anything and we are not exporting anything.
“Foreign direct investments are not coming but leaving, something is fundamentally wrong,” he emphasised.
He continued, “We don’t have indigenous big businesses that will rake in foreign exchange. Everything we consume here is imported.”
For his part, Mark Badu-Aboagye, noted that the low patronage of local goods, has resulted in some small-margin businesses folding up or exiting the Ghanaian market.
“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.
“So generally sending a signal…it looks as if we are if we have not lost it, gradually losing our position as a favourable investment destination in West Africa,” he stated.
