Economic shocks from fluctuations in energy price, is considered the biggest risk for doing business in Ghana over the next decade, according to the Global Risk Report 2016: an expert survey by the World Economic Forum (WEF).
Polled on a range of 28 risks, the WEF’s multi-stakeholder community of experts drawn from the public sector, business, civil society and academia, mentioned energy price shocks as the biggest risk for business in Ghana for the next decade.
The survey of 933 experts was conducted from mid-September to October ending, 2015.
The responses by the experts put the risk of severe energy price volatility, highest in Ghana than anywhere else in the world, and it is also considered the fifth most impactful business risk across the world by the experts.
Fluctuations in energy price are expected to put economic pressure on industries, especially those that are highly dependent on energy and their consumers.
The cost of electricity in Ghana topped the business community’s concerns in the last quarter of 2015, along with its huge unavailability at the time, according to the Association of Ghana Industries (AGI) business barometer.
Ghana’s drift from hydro powered generation to thermal energy, following low inflows into the Akosombo dam, came along with several hints of tariff hikes until parliament passed the Energy Sector Levies Act in December 2015, resulting in increments of 29 and 27 per cent in the ex-pump prices of petrol and diesel, and 59.2 per cent in the electricity tariff for domestic purposes.
The increment led to protests by organised labour and is believed to have been the main driver of inflation from 17.7 per cent to 19 per cent in January 2016.
The energy price risk in Ghana is followed in close succession by the risks from unemployment, debt and fiscal crises, unmanageable inflation, and the failure of urban planning and its attendant social, environmental and health challenges.
The risk perceived to be the sixth biggest is the failure of critical infrastructure, followed by cyber attacks, water crises, data fraud and theft, and the failure of national governance.
In sub-Saharan Africa, the most prominent risk identified to doing business is the failure of national governance.
For Europe and the world at large however, the experts see large-scale involuntary migration as the biggest emerging problem.
By Emmanuel Odonkor