The Vice President of the Ghana Union of Traders Association (GUTA), Joseph Paddy, says recent stability in Ghana’s exchange rate is creating a healthier environment for businesses to plan and grow.
Speaking on JoyBusiness Roundtable discussion on the theme “Mahama at 16 Months: Do Economic Narratives Match Real-Sector Outcomes?”, Mr. Paddy noted that predictability in the market is critical for business survival.
According to him, the current economic conditions, particularly the relative stability of the cedi against major foreign currencies, have made it easier for businesses to make projections and plan ahead.
“The economic condition we find ourselves in now is healthy for businesses. It helps you to do projection, it also gives you predictability. Unlike before, where it was difficult to project,” he stated.
He explained that in the past, frequent and sharp fluctuations in the exchange rate made it nearly impossible for businesses to forecast costs and revenues accurately.
“As a business, if you’re not able to do projection, you’ll be out of business,” he stressed.
Mr. Paddy highlighted that the recent stability has reduced the uncertainty that previously plagued the business environment, where exchange rates could change significantly within hours.
“Every morning you wake up, the dollar changes within a few hours. But now, this stability has given us a way to do projection,” he added.
The GUTA Vice President further indicated that the improved stability is enabling businesses to retain and reinvest gains back into their operations.
He illustrated this with an example, noting that compared to previous exchange rate conditions, businesses are now able to save substantial amounts, which can be reinvested for growth.
“We are plowing back those gains into our businesses again… So far, so good. The business community has seen some signal of stability,” he said.
Mr. Paddy maintained that while other factors also influence business performance, the current exchange rate stability remains a key positive signal for the private sector.
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Source: www.myjoyonline.com
