The Association of Ghana Industries (AGI) has made a passionate appeal to the government to establish at least a GHC1 billion stimulus package as a short-term measure to save industry from total collapse.
AGI warned that the manufacturing sector continues to shrink and Ghana risks losing its industrial base if government policies do not address quickly the challenges confronting them to revive the industrial sector.
The association is also calling for clear timelines that stipulate full restoration of power to industries because there are no concrete steps in place to end the rolling power cuts (dumsor).
The AGI believes these will give industry a little breathing space and could slow down the rate at which workers are being laid off by the day.
The president of the AGI, James Asare-Adjei, in an interview with The Finder, said without these short-term measures, industries would collapse, resulting in more lay-offs.
He argued that during the financial crisis, even capitalist states, such as the United States of America, came up with stimulus packages to save industries from total collapse.
He explained that industry has been battling with numerous challenges but the unprecedented depreciation of the cedi last year and extending load-shedding to industrial enclaves broke the camel’s back, resulting in the massive lay-offs.
Cumulative depreciation of the cedi for 2014 was 31.2%, compared to 14.5% in 2013, the Bank of Ghana (BoG) has said.
Asare-Adjei was worried that even though it was agreed that the load-shedding be extended to industrial enclaves for only December 2014, there is no indication as to when the policy will be reversed.
Rather, the load-shedding is continuing in industrial enclaves and is getting worse, he said.
Impossible to plan
According to the AG president, companies cannot plan because the Electricity Company of Ghana (ECG) is not following the load-shedding timetable.
As a result, he said, employers put together a shift system for their workers to continue to produce, but more often than not, the workers report to duty at times when they should have light, according to the ECG schedule, only to meet power cuts.
Asare-Adjei said the rapid depreciation of the cedi has led to a high level of taxation through continuous increases in import duties on raw materials, charged mainly in foreign currencies such as the dollar.
He listed the high cost of credit, unfair competition on the market, high labour costs, the multiplicity of taxes and excessive port charges as some factors that were negatively affecting the growth of Ghanaian businesses.
Asare-Adjei said the country needs long-term plans to revive industry.