Why Ghanaian Businesses Must Pursue Re-Engineering, Rationalisation
Ghana’s macro-economic environment is stabilizing; an economic restructuring program being pursued by Government under its short to medium term program is touted as yielding positive economic returns, reducing interest rates, reduction in tariffs, aggressive digitization, favorable balance of payment, positive external reserves, a stabilizing banking sector after a purge, decreasing non-performing loans amid limited revenue inflows and a fairly managed debt-GDP ratio.
Regardless, Ghana’s Business environment is on a reset, restart button demanding a review of Business Strategy, Cost, Operations Management, Finance and Improvement in Corporate Governance.
Companies are in debt (Hidden debt), Outstanding Accounts receivables threatening growth owing to cyclical debts, Auditors connivance with Owners to misrepresent Company Statements, Failure of Auditors to proffer opinion on Accounts to Clients for remedial measures, Changing Consumer trends demanding product diversification, revision of product marketing, or focus, Owner Fatigue due to increasing cost of “business facilitation” to get deals (My 10%), rancor between Bank Managers, Boards and Defaulters over loan settlements which risk becoming bad debt, lack of systems, structure, limited access to capital, linear markets, limited business development.
Ghana’s business environment is threatened by broad categories of issues relating to adjustments in Regulation, Increasing Cost of Doing Business owing to dwindling profit lines, Increasing Forex Losses, variances in the ability and willingness to pay, variances in owner’s expectation against market realities, increasing demands from shareholders for profit.
To achieve optimum growth commensurate with the projected company goals, many Ghanaian businesses must restructure and restart, revising their Company goals along the following lines: Pursue Reduction in Production and Customer Acquisition Costs, Better Understanding of Customer Segments, Evaluate Operational Expenditure to elicit cost savings, Review Marketing Strategy and Customer Targeting including pursuing digitization, Inventory Management and Sourcing, Digital Expansion and Consolidation, Revise Organizational Plans, Improve workflow processes, Planning and Goal Setting and establish consistency in growth.
The outlook for the last quarter may be tough but promising, If Companies can pursue “Cost Rationalization” approaches and maximize gains on efficiency, profitability ratios may increase in 2019.
Importantly, If you are a Ghanaian Business, the restructuring of the Ghanaian economy holds enormous promise in the outlook for the last quarter and 2019 if firms explore Innovation, Increased Research into Product Development, Partnerships, including the factors highlighted above.
John Armah is the C.E.O of Orios Group, a Business Development Practitioner, with vast experience in the development of new markets, start-ups, MSME’s and business strategy. A consultant, Trainer and adviser in business start-ups development, business financing, business development.