Ghana’s Economic Environment: Hostile and Unsustainable
Economist Prof. John Gatsi highlights the challenging business climate.
The withdrawal of multinational corporations from Ghana is a cause for concern, according to renowned economist and Dean of the University of Cape Coast.School of Business, Professor John Gatsi. He emphasized the negative effects of rising operational expenses and the depreciation of the Cedi on the business environment. Société Générale, a French banking firm with nearly two decades of presence in Ghana, is the most recent to declare its departure.
The European bank’s decision to exit Ghana is reportedly due to unfavorable cost-to-income ratios, among other factors. This trend of European banks retreating from Africa is a concerning development, and Absa Bank’s potential interest in acquiring the bank’s Ghanaian operations does little to alleviate the worries.
Professor Gatsi, a renowned economist, has sounded the alarm on the potential consequences of this exit. In a Facebook post on May 4, 2024, he warned that the departure of multinational companies from Ghana could lead to substantial job losses and damage the country’s business environment, which was once deemed favorable by international investors.
The entry of international companies into Ghana was initially welcomed with open arms, as it signaled a positive business environment and brought with it employment opportunities and revenue generation. However, the recent planned exit of multinational companies from the country is a worrying trend that must be addressed.
Professor Gatsi has criticized the government’s lack of communication on the issue, demanding clarity and action from the relevant authorities. He questions the absence of communication from the Minister in charge of business development and environment, urging the government to take the situation seriously and provide a clear plan to address the challenges facing the business community.
The hostile and unsupportive business environment in Ghana is a major concern, and the government must take immediate action to address the issues driving away international investors. The country’s economic growth and development depend on it, and the government must prioritize the creation of a favorable business climate to attract and retain investment.
