BTA2023 Ghana’s manufacturing sector is poised for significant growth as the current administration’s 24-hour economy initiative aligns with the previous government’s industrial policies. According to Dela Agbo, CEO of EcoCapital Investment, this synergy—if backed by targeted fiscal incentives—could create a transformative shift in both the real economy and capital markets.
Maximizing One District, One Factory (1D1F) with Round-the-Clock Operations
Agbo highlights the potential for increased productivity if factories under the One District, One Factory (1D1F) policy operate 24/7. This move, he argues, would enhance output, create jobs, and boost investor confidence in Ghana’s economy.
“If factories under the 1D1F initiative are incentivized to operate 24 hours a day, it will significantly boost productivity. Successfully integrating these two policies can create a win-win situation for businesses and the economy,” Agbo told B&FT.
While acknowledging investor caution due to economic uncertainties, Agbo remains optimistic. He believes that effective execution of these initiatives could fuel stock market growth, building on the Ghana Stock Exchange’s (GSE) record-breaking 56.17% gain in 2024—the highest on the continent.
Ghana Stock Exchange’s Sectoral Performance in 2024
Last year, the GSE experienced mixed performances across various sectors. The consumer goods sector led the charge, fueled by domestic demand. Unilever Ghana spearheaded the rally with a 140.4% gain, driving its share price from GH¢8.11 to GH¢19.50. Guinness Ghana Breweries followed with a 61.8% increase, while Fan Milk saw a modest 13.9% growth.
Meanwhile, the banking sector also performed exceptionally well:
- Ecobank Transnational: 106.7% gain (GH¢0.16 to GH¢0.31)
- GCB Bank: 87.4% rise (GH¢2.97 to GH¢6.37)
- Access Bank: 52.9% growth (GH¢1.80 to GH¢5.20)
- Standard Chartered Bank: 31.1% increase (GH¢5.45 to GH¢23.00)
However, not all stocks fared well. Cal Bank suffered a 27.1% decline, while Enterprise Group dragged the insurance sector down with a 17.2% loss.
Taxes, Exchange Rates & Business Environment
The government’s proposed abolition of taxes such as the e-levy and COVID-19 levy has raised concerns about potential revenue gaps. Agbo stresses the importance of expanding the tax base rather than overburdening a small group of taxpayers.
He also calls for tax reforms to encourage compliance, suggesting that Ghana could introduce tax refunds—similar to the U.S. model—to motivate tax filing.
Beyond taxation, Agbo emphasizes the need for exchange rate stability, which is critical for businesses, especially SMEs. Fluctuations in the cedi make long-term planning difficult, affecting both growth and investment confidence.
Additionally, high import duties remain a challenge for businesses. “If companies spend too much on import duties, their profits shrink. The government must address this to create a more conducive business environment,” Agbo noted.
A Path to Sustainable Growth
Despite these challenges, Ghana’s economy remains resilient. With the right mix of tax reforms, exchange rate stabilization, and business incentives, Agbo believes the country can unlock new opportunities for investment.
Even in an election year, the Ghana Stock Exchange has demonstrated strong performance, reinforcing investor confidence. As the nation gears up for economic transformation, policies that foster business growth, manufacturing expansion, and financial market stability will be crucial for long-term success.
