In the latest Standard Bank Africa Trade Barometer (SB ATB) report, Ghana experienced a significant shift, falling from 3rd to 7th among 10 African countries. This drop indicates mounting challenges within Ghana’s trade environment, even as a wave of cautious optimism builds among local businesses.
The decline points to issues in critical areas such as government support and infrastructure, which are essential for sustaining market competitiveness in the African context.
This 4th edition of the SB ATB report sheds light on the current state of Ghana’s business landscape. According to the findings, local businesses perceive a decline in government support for trade initiatives. Major factors contributing to this perception include high inflation rates, steep taxes, and ongoing foreign exchange constraints. These economic pressures not only strain the operational capacity of businesses but also dampen their competitiveness in a rapidly evolving African trade landscape.
One of the report’s focal points is the impact of infrastructure constraints on Ghanaian businesses, with power and transportation being particularly problematic. Reliable infrastructure is vital for business growth, yet these ongoing limitations hinder efficient operations and increase operational costs. Although Ghana has made strides in the digital financial sector, with rapid growth in digital services for cross-border transactions, traders continue to face substantial barriers in accessing sufficient foreign currency liquidity.
Around 83% of surveyed businesses in Ghana cited the limited availability of foreign currency as a major concern, illustrating the challenges they face in securing resources amidst volatile currency fluctuations. This difficulty impacts their ability to participate effectively in cross-border trade and hampers efforts to strengthen Ghana’s position in regional markets.
Despite these challenges, business confidence in Ghana showed a surprising uplift. The country’s business confidence index climbed from 47 to 55, reflecting local optimism for economic prospects in the years ahead. This increase in confidence is a promising indicator of the business community’s belief in potential growth, suggesting that, despite current hurdles, many businesses expect improved economic conditions and forecasts for 2024-2025.
The Standard Bank Africa Trade Barometer report covers 10 African countries, all of which are signatories to the African Continental Free Trade Area (AfCFTA). Together, these nations represent 66% of the continent’s GDP and 45% of its population, making the insights from this report highly representative of Africa’s economic dynamics.
While Ghana saw a drop in its ranking, other countries experienced notable shifts as well. Tanzania moved up from 8th to 4th, Mozambique from 4th to 3rd, Nigeria from 6th to 5th, and Zambia from 9th to 8th. Uganda fell from 7th to 9th, and Kenya dropped slightly from 5th to 6th. South Africa, Namibia, and Angola maintained their rankings at 1st, 2nd, and 10th, respectively, suggesting a level of stability within these economies.
These ranking changes underscore the complexities of trade environments across Africa, where varying degrees of government support, infrastructure quality, and economic policy influence the competitive landscape. For Ghana, the report’s findings highlight the need for targeted policy interventions to address trade-related challenges and boost infrastructure support. As Ghanaian businesses look forward to improved economic forecasts, strategic efforts in addressing these core issues could help the country regain its competitive position in the regional trade rankings.
Overall, the report paints a nuanced picture of Ghana’s trade environment, balancing concerns about government support and infrastructure with a strong sense of resilience and optimism within the business community.
