AGI Business Climate Survey 2006

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AGI Business Climate Survey 2006

• Presentation of Results
• Novotel, Accra
• 18th January 2006
• 1600

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CONTENT

• About AGI
• About this Survey
• Characteristics of Participating Companies
• Results Business Confidence
• Results Export Confidence
• Results Challenges to Doing Business in Ghana
• The Way Forward

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Association of Ghana Industries AGI

• Founded in 1958
• Objectives
• Conducive business climate which allows Ghanaian
  companies to be internationally competitive
• Provide services for members and business
  community

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ABOUT AGI

• More than 550 active members in all regions of
  Ghana
• over 20 sectors represented
• 59 Small 29 Medium 12 Big Companies (end
  2006)
• Offices in Accra, Tema, Kumasi/Sunyani and
  Takoradi
• Representations in Volta and Northern/Upper
  Regions

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Why a BCS in Ghana?

• There is no regular survey, monitoring the
  business climate as perceived by the business
  community in Ghana
• Perceptions and expectations are important for
  investment decisions
• Major challenges/constraints rated by CEO
  Snap-shot of the mood of business leaders
  Voice of the Private Sector
• The AGI BCS is a valuable input for Private
  Public Dialogue in Ghana

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About this Survey

• AGI BCS 2006 Pilot Project
• Funding through GTZ Ghana (PPP)
• Know how provided by GTZ South Africa (ASPB
  Project for SADC Region)
• 226 face-to-face interviews with CEO of member
  companies (October/ Nov 2006)
• Accra, Tema, Western, Ashanti, Brong Ahafo

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Questionnaire

• Part A Statistical Information
• Part B Business Confidence
• Part C Export Confidence
• Part D Challenges to doing Business
  in Ghana
• Except for Part A, all answers were rated on a
  scale from 1 to 10

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Business (Export) Confidence Index

• The BCI is measured as a ratio of current against
  expected business / export performance.
• If business levels are expected to be better in
  future, the ratio is higher than 1.
• Regular monitoring over time allows comparison of
  confidence levels (BCI) and can serve as a
  barometer for investors.

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Which Challenges where measured ?

• National Load Shedding Programme
• Quality of Power Supply
• Cost of Credit
• Access to Credit
• Competition from imported Goods
• Legal Environment

• Access to Land and Land Ownership
• Bureaucracy
• Harassment by Local Authorities
• Corruption
• Taxation
• Communication Facilities
• Lack of skilled Workers

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How did we measure these 13 challenges?

• Q To what extend do you perceive the NLSP as a
  challenge to your business ?
• A Rating Scale 0 No Problem
• 5 Problem which
  affects my business
• 9 Threat to my business

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Reports

• Summary Report 3000 copies to participants,
  members and interested public
• Full Report 300 copies to stakeholders
• All individual company data is strictly
  confidential

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• AGI BCS 2006
• Characteristics of Sample

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Staff at Sep 06
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Small 20
Billion Cedis
Small Big 2 Million US
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8 of companies employ no women. 60 employ up
to 10
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AGI BCS 2006

• RESULTS

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Business Performance 2006

• Smaller companies rate their own performances
  lower than medium and big companies do.

By Size of Companies
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Business Confidence 2007
By Size of Companies
Big and especially medium sized companies are
much more optimistic than small companies.
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Business Confidence
POOR 14 of respondents rated 2006 as poor.
Only 4 expect 2007 to be poor. FAIR 49 rated
2006 as fair. 23 expect 2007 to be
fair. GOOD 37 rated 2006 as good. 73 expect
2007 to be good.
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• Exporters
• Almost 50 of respondents already export to
  ECOWAS markets
• Only 2 additional companies (0.9) plan to start
  exporting to ECOWAS in 2007
• 32 of respondents export to other (than ECOWAS)
  markets
• Only 1 additional company plans to start
  exporting outside of ECOWAS in 2007

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ECOWAS Export Confidence

• Low
• 39 rate performance as low
• Only 7 expect 2007 to be low
• Fair
• 42rated their 2006 performance as fair
• High
• 54 expect high exports for 2007
• Only 20 of respondents rate their current export
  performance as high

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AGI BCS 2006

• Challenges

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Results Challenges Summary
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National Load Shedding Program by Regions

• Respondants saying NLS is a effecting their
  business seriously or is a threat (in )

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Impact of National Load Shedding Program by
Sectors
Respondents saying NLS is a serious problem,
major problem or threat (in )
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Cost of Credit Locally and Foreign owned
Companies
Resp. Rating high cost of credit as a serious or
major problem or threat in
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Central Bank Prime Rates International
Comparison
Ghana
CB Prime Rate The CB Prime Interest Rate is the
interest rate charged by Central Banks to their
most creditworthy customers
Source//www.fxstreet.com/fundamental/interest-ra
tes-table/ 17.01.07
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Bank Base Rates in Ghana on 17th January 2007

• Highest 21.50
• Lowest 18.50

Source www.businessghana.com/ 17.01.07
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Quality of Power Supply by Regions
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Why is competition from imported goods a serious
problem or threat?
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The Way Forward

• We hope that the results of the AGI BCS 2006 will
  be considered by the Government and adequate
  action will be taken soon.
• The AGI BCS 2007 will be conducted in August 07
  with results being presented in September.

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• Unanswered
• Questions

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Unquestioned Answers
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Thank You to All of You ! Enjoy the
Cocktail!