High Cost of Doing Business Undermining Ghana’s Competitiveness — Analyst Warns
By: Solomon Nartey Tetteh
Economic Analyst Emmanuel Boateng has cautioned that Ghana’s persistent high cost of doing business is eroding the competitiveness of local enterprises, limiting their ability to survive, expand and create jobs.
Speaking on Business Breakfast on Zed 101.9FM, Mr. Boateng said the country’s cost structure continues to push up unit production costs, compressing profit margins and making locally produced goods less price-competitive compared to imports.
According to him, the trend is clearly reflected in inflation data, which repeatedly shows that many imported products are cheaper than similar goods produced domestically.
Mr. Boateng explained that Ghana faces classic constraints associated with high production costs, including costly capital and infrastructural deficits which discourage risk-taking and limit business expansion.
He emphasized that these challenges are particularly devastating for small and medium enterprises (SMEs), which dominate Ghana’s economy.
“These costs directly determine whether SMEs invest, whether they can survive at all, and whether they are able to employ anyone,” he stressed.
Mr. Boateng added that the combined effect of these structural constraints is evident in consumer behaviour. Given two products of the same quality, consumers inevitably choose the cheaper option, a disadvantage for Ghanaian businesses struggling with high input costs.
He warned that unless these bottlenecks are addressed, local firms will continue to lose ground to imports both in domestic markets and in export competitiveness.
Mr. Boateng noted that recent assessments, including findings highlighted in a PricewaterhouseCoopers (PwC) report, show a modest shift toward lower operational costs for businesses.
He explained that current data points to a downward trend in the cost of capital, with interest rates beginning to ease following policy measures introduced by the Bank of Ghana.
“It is within these times that the cost of capital is actually coming down. The cost of borrowing is easing, given the cash signals we’ve seen from the monetary policy stance,” he said.
Mr. Boateng added that the central bank may even reduce its benchmark rate further, depending on how economic conditions evolve after the festive season. He recalled that the Bank of Ghana Governor hinted at this possibility during a recent Monetary Policy Committee press briefing.
“It appears the central bank may cut rates further, depending on how things go after this festive period. I would not be surprised at all,” he stated.
