Irregular power supply has been described as the topmost constraint to the growth of businesses in Ghana, the Association of Ghana Industries (AGI) Business Barometer Index (BBI) for 3rd Quarter 2012 has stated.

This development, according to the report “could be attributed to the load shedding exercise embarked upon by the Electricity Company of Ghana over the last four months.”

The AGI BBI measures the level of confidence in the business environment and predicts short-term business trend. It also expresses the state of the business climate in the country.

According to the report, depreciation of the cedi and high level of taxation were ranked second and third respectively as obstacles restraining the expansion of businesses in the country in the third quarter of 2012.

Low access to credit and cost of credit placed fourth and fifth positions respectively. At the tail end of the table were inflation, low purchasing power and competition from imported goods which were ranked eighth, ninth and tenth respectively.

The report said “this is the first time since the inception of the AGI Business barometer Survey that competition from imported goods is being ranked 10th. It is normally ranked at mid or upper end of the table. This shows how realistic the AGI Business Barometer is, as it always identifies the most pressing challenges facing the business community. This is the reason why challenges such as poor power supply, depreciation of the cedi and inflation have displaced competition from imported goods from the upper end of the table.”

With regards to the various sectors, access to credit and high cost of raw materials maintained first and second positions respectively as the top two obstacles hindering the growth of the agriculture sector operators.

“Also, access to credit, delayed payment and unfair awards of contracts were identified as the top three challenges facing the construction sector. Lack of contracts which was ranked third in Q2 2012 dropped to the seventh position in Q3 2012 whilst low purchasing power (also ranked third in Q2 2012) did not feature in the top 10 in Q3 2012. However, bureaucracy (which did not feature in Q2 2012) appeared in the top 10 in Q3 2012.”

The report further indicated that the manufacturing sector identified poor power supply as the most important factor increasing cost of operations of the sector. Depreciation of the cedi and high level of taxation were also ranked second and third respectively.

This development, it said, calls for an immediate solution as all the top three identified challenges facing the sector could have significant impact on cost of production and render local manufacturers less competitive in the last quarter of 2012.

Again, poor power supply, depreciation of the cedi and high level of taxation emerged as top three obstacles to the development of the Service Sector.