Ghanaian industries urge stimulus to save them from collapsing

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Ghana’s industries, reeling under the deepening crisis of power outages, have asked the government to establish a stimulus package to save them from collapsing, local media reported here Monday. wpid-investments.jpg
The Association of Ghana Industries (AGI), according to local newspaper The Finder, has therefore appealed to government to establish at least a 1 billion Ghana cedi (312.5 million U.S. dollar) stimulus package as a short-term measure to save the industries.
“The association is also calling for clear timelines that stipulate full restoration of power to industries because there is no concrete step in place to end the rolling power cuts (Dumsor),” The Finder quoted the AGI as saying.
The president of the AGI, James Asare-Adjei, told The Finder that, without the short-term measures, industries would collapse.
He explained that industry had 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 massive lay-offs.
Asare-Adjei was worried that even though it was agreed that the load-shedding be extended to the industrial enclaves for only December 2014, there was no indication as to when the policy would be reversed.
Rather, he said, the load shedding was continuing in industrial enclaves and was getting even worse.
He said companies could not plan because the Electricity Company of Ghana (ECG), the country’s major power distributor, was not following the load shedding timetable.
Asare-Adjei noted that the rapid depreciation of the cedi had also led to a high level of taxation through continuous increases in import duties on raw materials charged mainly in foreign currencies.
He mentioned the high cost of credit, unfair competition on the market, high labor cost, the multiplicity of taxes and excessive port charges as some factors that were negatively affecting the growth of Ghanaian businesses.
Meanwhile, the Ghanaian government has confirmed there will be financial closure of contracts to bring power badges to ease the current load shedding exercise.
The ministry of power has announced emergency plans to acquire two emergency power plants costing over 250 million dollars.
Civil society group, Africa Center for Energy Policy (ACEP), has questioned government’s capacity to raise the money because it was not captured in the 2015 budget.
But the minister of power, Kwabena Donkor, says some infrastructure would be installed at the Tema harbor, 38 km east of here, to help evacuate power when the badges arrive in April.
The hardest hit by the load-shedding exercise are operators of small-scale businesses such as hairdressers, artisans of all kinds, drinking and ‘chop’ bar operators, convenience and barber’s shops.
Big businesses that cannot halt their operations are forced to purchase generators to run their production lines but the extra cost of production is always passed on to consumers.
Ghana’s President John Dramani Mahama in his third State of the Nation address on February 26, 2015, promised to fix the power situation christened “dumsor,dumsor” (switch off, switch on).
“We have been here before; in 1983, in 1998, in 2006 and 2007, we suffered a similar occurrence. I do not intend to manage the situation as has been done in the past. I intend to fix it,” Mahama told the nation. Enditem

Source: Xinhua

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