The Plight of Entrepreneurs in Ghana’s Economic Landscape

Ghana’s economy has faced significant challenges in recent years, with the cost of living skyrocketing and wages struggling to keep pace. This has led to widespread financial strain across the population, with entrepreneurs being among the hardest hit. Isaac Sesi, CEO of Sesi Technologies, offers a candid and sobering perspective on the current economic situation, painting a picture of the struggles many business owners face in today’s Ghana.

Sesi’s assessment of the government’s handling of the economy is stark and critical. According to him, “Any objective person analyzing the state of the economy will come to the very reasonable conclusion that this government has been one of the worst we’ve ever had.” This is a damning statement, but one that reflects the sentiments of many who have seen their purchasing power eroded by inflation and their business operations disrupted by policy changes.

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The cost of living in Ghana has outpaced earnings to such an extent that even those who are employed are struggling to make ends meet. Sesi reveals that more than half of his employees have requested raises this year alone because their current salaries no longer suffice to live comfortably. This is not an isolated case but a reflection of a broader issue where wages have remained stagnant while the cost of goods and services has soared.

For entrepreneurs like Sesi, the challenges are multifaceted. The rising cost of raw materials, exacerbated by the depreciating cedi, has made it increasingly difficult for businesses to maintain profitability. In the case of Sesi Technologies, the situation is particularly dire. Sesi recounts how his company spent years and significant financial resources developing a new grain storage technology for farmers, only to face untenable manufacturing costs today.

“In 2020, I was able to manufacture one unit for $1.50. I could sell at GHC 15 and still make a profit,” Sesi explains. However, due to the steep increase in production costs, the same product now costs $2.80 to manufacture, and the selling price has had to rise to GHC 45. For smallholder farmers, who were the intended beneficiaries of this technology, the new price is simply unaffordable. This not only jeopardizes the financial viability of Sesi’s business but also threatens the livelihoods of the farmers who depend on this technology.

Sesi’s frustration is palpable as he considers the potential waste of years of hard work and hundreds of thousands of dollars. The product, once poised to be a major revenue source, now risks abandonment because neither the company can afford to produce it, nor can the farmers afford to buy it. This dilemma underscores a broader issue where innovative solutions that could benefit the economy and society at large are being stifled by the current economic conditions.

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The situation worsened for Sesi when he recently imported products worth $100,000. While these goods were in transit, subsidies were removed, resulting in duties and taxes ballooning to $90,000—an astonishing 90% of the product value. This unexpected cost increase has made it nearly impossible for Sesi to sell the products at a profit, further straining his business. He notes, “This year has been one of our most challenging, and I know many entrepreneurs who have shut down their businesses and left the country because it has become too difficult.”

The economic struggles of entrepreneurs like Sesi are not just about numbers; they are about the real-life consequences of economic mismanagement. Businesses are closing, jobs are being lost, and many talented entrepreneurs are being driven out of the country. Sesi’s experience highlights how policy decisions at the macroeconomic level can have devastating effects on the ground. The removal of subsidies and the volatile exchange rate are just a few examples of how poorly executed policies can cripple businesses.

Sesi’s critique of the government is scathing, particularly when he highlights the disconnect between those in power and the everyday realities of Ghanaians. He argues that the politicians responsible for the economic downturn are insulated from its effects, making it difficult for them to grasp the extent of the suffering their decisions have caused. He dismisses any attempt to compare the current administration with the previous one, stating, “Oh, and don’t even come with the ‘But it was worse under Mahama’ argument because that’s a very silly argument.”

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In conclusion, the current economic situation in Ghana presents an uphill battle for entrepreneurs. The rising costs of production, unpredictable policy changes, and the deteriorating value of the cedi are just a few of the challenges they face. For entrepreneurs like Isaac Sesi, these issues are not just theoretical; they are existential threats to their businesses and the livelihoods of those they employ. As Ghana continues to navigate these turbulent economic waters, the experiences and struggles of its entrepreneurs should serve as a sobering reminder of the urgent need for better economic management and more supportive policies.