Blue Skies Founder and Chairman Anthony Pile gives his view on the development of Ghana’s export economy.
Ghana needs investors and there are plenty of opportunities for foreign direct investment (FDI) in a country where there is an abundance of raw materials and a superb workforce in readiness. Like Blue Skies, there is potential for FDI cash to go into projects that add value at source or in other words, make the finished product like chocolate, or jewellery or doormats or even footwear.
However there are preconditions for such FDI activity where the products are bound for export to the West. One important prerequisite is low inflation in Ghana or failing that an inflation rate that is matched by a Cedi that depreciates at a comparable rate. If prices are to rise by 20% then the currency should weaken by 20% if the exporter is going to be able to cover operating overheads once his currency is converted to Cedis.
In Blue Skies, we shall look for ways in 2016 to reduce costs without cutting back on our staffing levels. The company’s leaders in Ghana have come up with some ingenious ideas which will allow us to reduce overheads roughly by the expected inflation level, but it will call for some more bold investment from the Group. So Blue Skies is comfortable for now. But if the Bank of Ghana continues this ploy which makes importing attractive and exporting unattractive, there can only be one outcome: a still weaker economy with very few features to attract new money for exporting industry.
This is a shame since industry employs people and although the Ghanaian government employs a huge number, in a weakening economy no one can be sure of employment forever.