Exit of multinational firms: Ghana losing its position as favourable business destination – GNCCI Boss

The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, has observed that Ghana is gradually losing its position as a favourable destination for doing business in the West African Sub-region.

He said that generally, the purchasing power of the ordinary Ghanaian has dwindled over the years, leading to low patronage of goods and services.

This, he noted, has resulted in some small-margin businesses folding up or exiting the Ghanaian market.

In late April, a multipurpose online platform for delivery services, Glovo, announced its intention to cease its operation in Ghana effective May 10, 2024.

Also, media reports in early May suggested that French bank Société Générale (SG) Ghana is planning to exit the country’s banking sector.

However, the Managing Director of SG-Ghana, Hakim Ouzzani, said at the bank’s 44th Annual General Meeting in Accra that the media reports did not emanate from the bank, describing them as “rumours.”

Exit of multinational companies from Ghana: A wake-up call for economic diversification

But Mr. Badu-Aboagye, speaking on Joy FM on Thursday, maintained that the economic conditions in the country are the cause of the rising cost of living as businesses fold up and employees get fired regularly, exacerbating the unemployment situation.

According to him, the exit of multinational companies from Ghana is “sending a signal that there’s something fundamentally wrong with the business environment.”

“And if you look at the reasons they cited, these are reasons that are affecting even domestic businesses.

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“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.

He emphasised that the exit of some multinational companies signals that local businesses are struggling within the economy.

Meanwhile, the founder of the Pan African Heritage Museum (PAHM), Professor Kojo Yankah, has called for support for indigenous businesses in the wake of reports of expat companies exiting Ghana. In his view, the exit of foreign companies presents an opportunity for local entrepreneurs.