Energy crisis partly slows business optimism in Ghana – BoG
The Bank of Ghana has stated that the country’s current energy crisis has had a negative impact on business confidence and optimism.
Ghana has been experiencing power supply shortfall against rising demand leading to blackouts especially in the capital, Accra.
According to the central bank’s latest surveys conducted in March and April 2013, business sentiments have been weakened.
The BoG’s Business Confidence Index declined to 99.0 in March 2013, from 104.1 in December 2012, says the Monetary Policy Committee May 22, 2013.
“This was partly due to the energy crisis which in turn lowered business optimism about growth prospects and heightened inflation expectations over the medium-term horizon,” Dr Kofi Wampah, Chair of the Committee told the press.
Similarly, the Consumer Confidence Index also fell to 96.1 in April, from 105.0 in January 2013, the BoG added.
The International Monetary Fund (IMF) in April 2013 warned that the current energy crisis in Ghana if not resolved could curtail the country’s economic growth.
In a mission assessment of Ghana’s economy, the Washington-based Fund noted that despite the country’s strong economic potential, short-term stability risks have risen.
“Energy sector problems could curtail growth,” the IMF said April 12, 2013 in a statement.
StratLink, an international firm focused on providing strategic and financial advisory services in emerging and frontier markets, also indicated that Ghana’s energy crisis could hurt tax collection.
In an economic review and assessment update for April 2013, StratLink reported that the power rationing in Ghana has been affecting businesses as “production levels and revenues take a hit”.
According to the New York-based research group, Ghana’s energy crisis spurred on by the West African Pipeline Company’s gas pipeline damage as well as the closure of one of its power plants has left the country with an energy deficit of around 300 megawatts.
“This is expected to affect tax collection ability,” Stratlink said in its report.
By Ekow Quandzie