Business Strategist, David Ofosu-Dorte, says businesses looking to expand this year will face very severe challenges.
According to him, while many businesses had not envisaged such a harsh economic terrain coming into the New Year, the prevailing crisis means companies would have to adapt and probably shelve some of their plans in order to weather the storm.
He noted in particular that the ongoing domestic debt exchange will deprive businesses of key financing support as a result of the liquidity problems it will create for banks in the coming months.
Speaking on JoyNews’ PM Express Business Edition, he said, “Most businesses don’t expand using returns on bonds except the financial sector. Businesses expand using loans and debt instruments or other corporate financing instruments that they take.
“The challenge is that the banks are going to have liquidity problems, so you still will not be able to do that expansion because the banks will not be giving you the money or the cost of that borrowing will be so outrageous that you’ll not be able to make returns on it so definitely expansion programmes are going to be very very difficult.”
He added that even for businesses that have other sources of income, borrowing for expansion will still be very difficult.
“And if you reduce it to GDP terms, the government’s own expectation of GDP is not that bullish because if businesses are not growing and expanding then we are going to have a situation where we are going to contract. There will be some growth but I don’t expect very bullish growth,” he said.
Latest Stories
- How prosperity fuels dowry demand in India
41 mins - US debt ceiling deal ready for Congress vote, Joe Biden says
1 hour - Erdogan hails election victory but Turkey left divided
2 hours - Covid was not a cover-up for corruption – Akufo-Addo
3 hours - Sanitary pads should be tax-free; not menstrual luxury – Rosetta Ntriwaah Boakye
3 hours - Venice Biennale: The woman behind the whirlwind festival
4 hours - betPawa PL: Medeama go four points clear; Hearts of Oak lose against Legon Cities
4 hours - Kamaldeen Sulemana scores twice as Southampton draw with Liverpool
4 hours - Leicester suffer Premier League relegation despite win over West Ham
4 hours - Leeds United relegated after final day defeat to Tottenham
4 hours - Dealing with absenteeism during menstruation; sanitary pad bank to aid girls in Obuasi
5 hours - We shall overcome our present economic difficulties- Akufo-Addo
5 hours - Independent Power Producers threaten to cut power supply by June 30
6 hours - IMF bailout won’t immediately end Ghana’s difficulties – Akufo-Addo
6 hours - NPP France branch dismisses claims of singing accolades for a presidential contender
7 hours