John Awuni, President of the Food and Beverages Association of Ghana (FABAG), has urged the government to reconsider its tax system to create space for businesses to flourish. He contended that the existing taxes, such as the Growth and Sustainability Tax, were stifling businesses.
Speaking on Citi TV on Monday, May 6, 2024, Awuni highlighted that multinational companies, including Glovo, Dark and Lovely, Nivea, Jumia Foods, and Bic Pens, had exited Ghana due to an environment that was no longer conducive to their growth and expansion.
Awuni said "More companies have left the country than has been announced. I have talked with them one-on-one and many of them have opened satellite offices in Cote D’Ivoire and Togo. There are some products which are from Nigeria, Togo, and Cote d’Ivoire, this is real. Clearly, the model the former finance minister Ken Ofori-Atta kept building was not meant for any economy to develop and stand and do well. It was a tax upon tax."
"They [government] need to re-look at the tax system, they need to re-engineer our tax system to give room for the private sector to make savings, expand and create jobs. We're in an election year, and the model this economy is building on is not a model that will let the private sector develop to create employment or make the economy expand. The government must reduce their tax system," he noted.
He added: "Growth and Sustainability Tax, you say that a company that posts account losses for five years or more should pay tax on their losses, where is it done at all? It’s quite annoying, it’s clearly unacceptable. At the end of the day, it’s better for him [company] to exit. We think that the Ghanaian economy will suffer more because many businesses still want to leave.
He also expressed concern over the high cost of living in Ghana, emphasizing that life has become unbearable for many Ghanaians.
Meanwhile, a banking expert, Dr. Richmond Atuahene, has said Ghana's banking sector depicts a sector that has been in a state of crisis for the past ten years.
Citing the non-performing loans of Ghana's banking sector, which have averaged approximately 16.5% over the last decade, the banking specialist emphasized that ample literature from the International Monetary Fund (IMF) indicated a scenario of a full-blown crisis in Ghana's banking sector.
Speaking on the exit of some multinational brands such as Glovo, NIVEA, Jumia Foods, Game, Dark and Lovely, Bic, BET365, and others due to the economic crisis, Dr. Atuahene described the move as worrisome.
He noted that most conglomerates would hesitate to conduct business in Ghana due to the country's unfavorable macroeconomic indicators, which pale in comparison to those of neighboring countries in the Sub-region.