Exclusive Interview with Ghana Chamber of Commerce and Industry

Interview with Mark Badu-Aboaye, CEO of Ghana Chamber of Commerce and Industry

Let‘s talk about the general business environment. How would you describe the doing business in Ghana in 2017 and secondly what actions from the government or relevant authorities would be welcome to improve the environment and facilitate the business conditions for businessmen inside Ghana? 

2017 has seen a renewed confidence in the business environment compared to the previous 4 years. We perceive that there is a bit of stability in the economy. The foreign exchange market has been stable, inflation has been coming down, policy rates are also trending down and the TB rate is also coming down. Unfortunately, the lending rates are still high. We have been advocating for a reduction in those. While these key variables are there it means our businesses can plan ahead of time. I see 2017 as being quite stable, particularly compared to 2016 when we had the energy crisis. We have stabilized the energy crisis this year and so with all these things put together we have a very much improved business environment in 2017. 
 
Is there anything specific that you would like to push for from the government? Some sort of action? 

Now for us, the key issue is the high interest rates. Looking at the economic variables, once the policy rates comes down and the inflation comes down, the lending rates should come down. However, the lending rates have been static, hovering around 30 to 35% which is difficult for businesses. If you are borrowing at 30 to 35%, it can be difficult for you to produce and become competitive and so businesses are running down because of these high interest rates. We have had engagement with the vice president of Ghana and something seems to be planned to improve this but the earlier we do it the better. If you look at the rest of West Africa and sub region and even across the globe, our lending rates are of the highest and they are making business in Ghana uncompetitive internationally.  

We have heard many complaints from many businesses that we have spoken with about the limited means of growing. 

Also, there is the unavailability of long term funding. If you want to set up an industry you need a loan that will last at least 5 years but you will realize that most of the facilities are available only for short term funds be it one year or six months… This also makes things difficult for businesses. So, what they do is they borrow and they keep on rolling it over with compound interest or high interest that then becomes very difficult for businesses to pay back. 

The highest investment potential is in the agro-processing industry. The reason being that the raw materials are available in Ghana.

What are the most potential investments in Ghana nowadays? 

The highest investment potential is in the agro-processing industry. The reason being that the raw materials are available in Ghana. Here, whatever you plant will grow very well. We are blessed that we have very fertile land. The issue has to do with adding value to these raw materials. We have a lot of watermelons and oranges for example that are going bad because we don’t add value to them. We have to get companies to come in and add value, the market is there, in West Africa along there is between 10 and 15 million population so if you manufacture here you are likely to reach that market. We import a lot of fruit juice from South Africa and other countries even though we have the raw materials here. It is about time that we invite a lot of investors into this area. It is one of the areas that we have been pushing for, FDI for Ghana. This is a very good sector for anybody who wants to invest in Ghana.  
 
What about raising awareness among the local population when it comes to agribusiness? We have been with the Ghana Agribusiness Centre which is a sort of website portal with all of the information on agriculture on it. It is a private initiative and they are trying to boost awareness amongst students and youth. Are you doing something similar? 

The initial capital needed for certain factories is very high and it may be very difficult for a young Ghanaian or a student to get such sums because you really need a good factory to be able to add value to these raw materials. The awareness is there but as I said, facilities in Ghana mean that you have to pay 35% just on your loan then add labour and income taxes… by the time you put everything together you are likely to be running at a loss. So even though we are aware of it, and the potential is there, the challenge is getting the financing in these areas. 
 
In terms of the branding of Ghana itself as an investment destination, The President of Ghana’s Chamber expressed that Ghana needs an aggressive and strategic branding campaign. What should be done in this regard? How would you package Ghana for international investors? 
 
 Ghana should be identified with either a particular project or product or we should have an identity. At the moment that is not the case. The previous government set up brand Ghana but the activities didn’t achieve what they intended. For instance, if you mention Ghana, people will probably talk about cocoa, maybe about football but how do we serve these products to the outside world? We export cocoa in its raw form, they add value to it and they bring it back to us as chocolate and we buy it at a higher price. Why don’t we brand Ghana as a cocoa producing and manufacturing country? That would attract a lot of investment as we have a lot of cocoa. Why do we always send it out in its raw form? It is really about time we brand the country of Ghana, we should have an identity, we should be identified with a particular product or project. 

Is this branding what you do with GIPC, or do you do it on your own? 

We are all stakeholders; we work closely with GIPC but any time we see an opportunity we try to brand Ghana on our own but we work as a group. There is company called Brand Ghana, and their responsibility is to brand Ghana. They are in charge of that, we look at the investment aspect of it so we work hand in hand with them. 
 
 
Is Brand Ghana under GIPC or a particular ministry?

I think it is under the Ministry of Trade but it is not as strong as needed, going forward we need to strengthen it and identify and develop a specific brand for Ghana. 

In terms of the Chamber, can you tell us about some of your strategic associations or cooperations that you have recently closed? 
 
We are members of the International Chambers of Commerce and Industry we are also members of the Pan African Chambers of Commerce and Industry. The President of Ghana is actually the president of the Pan African Chambers of Commerce and Industry. Just last week, the Chamber collaborated with the Pan African Chambers of Commerce and Industry to bring all Chambers of Africa into Ghana. We had a meeting called the Prosperity Conference which brought about 45 chambers of commerce within and outside Africa, to look at creating a free trade area. We want to create more markets in Africa. Over the years the discussion has been at the governmental level but now we want to see how the private sector can get involved. Production and distribution of goods and services are being done by the private sector so if you want to create a market, the private sector should be involved. We have discussed a number of issues, we had the Commissioner of AU being part of it, we had the minister of Trade and industry as the key note speaker etc. so it was a well-attended program with good participation and discussion. Currently we also have a program with the USAID whereby we are hosting the trade hub in Ghana for AGOA- African growth and opportunity Act. We have basically realized that Ghana is not taking advantage of AGOA since its inception whilst other countries are generating a lot of revenue for example Kenya, Lesotho and Nigeria, but as a country we have not taken advantage of it. So, we have decided to create a trade hub to train exporters and potential exporters in Ghana with the AGOA. They have done about 15 training programs and workshops. They now understand what they need to export under the AGOA, the quality and customs issues etc. because we brought in experts from the USA to come in and tell them. Quality was an issue and I always say that once you have an AGOA program you can’t just get up and take a commodity that is below standard to the US, you need to meet specific quality standards. We expect to educate our members on the kind of quality they need to export. We are also working with the BUSAC fund which is basically trying to create the right business environment for Ghana. We have done two key advocacy programs with them, one being to improve efficiency and reduce costs at the ports. Our advocacy led to the paperless systems at the ports for example. We highlighted the need for the government to improve the efficiency because the human intervention was just too much so for example a product that should take less than a day to clear from the port used to take 24 days. According to our research that was amongst the longest durations in the world. So now with the paperless system you don’t have to go to the port, it can be done online with the right documentation.  

We are also a member of the Federation of West African Chambers of Commerce and Industry. Our President is also one of the vice presidents of this. We have a project called the Sea Link project which tries to get vessels to run along the west and central African coasts to enhance trade within the sub region. Today, if you want to export to Nigeria by sea, you have to go to Europe before it comes back to Nigeria even though Nigeria is just about an hour from here by boat. Now it takes 6 days at least. If you have a perishable commodity it would be destroyed by the time it got to Nigeria. Ghana is playing a key role in ensuring that we get these vessels to supply the West and East African coasts to facilitate trade among African countries.  

What is your personal vision for Ghana? 
 
My personal vision for Ghana is to see an economy that is well diversified and not dependent on exports of raw materials like cocoa or timber or that imports almost everything into the country. I would like to see an industrial economy so to speak. That is why we support the One District, One Factory initiative that is being brought in by the government of Ghana. We have about 275 districts so if we have one factory in each district and we are producing a lot of the things that we import now it saves us from sending lots of our hard-earned currency outside and we could export some of our products to earn foreign currency and stabilize our local currency. The reason why we have an instable currency is because we import almost everything. It is about demand and supply. When there is demand to import it means your currency will depreciate but we should be able to produce most of the things that we consume here and still be able to export. We should be counted amongst countries that export many goods. That is the kind of economy we should be heading towards.

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