With rising cost of living, growing frustration, inertia in the economy and a sense that nothing is working, the scenes in Accra when several young people took to the street last week to voice their frustration, was a sign of the times.
But what are the personal stories triggering these strong emotions and the growing frustration in the system? A section of the society which is greatly impacted by the state of affairs, are entrepreneurs. It is amazing to see so many talented individuals starting their own businesses, but in the face of adversities like high cost of inputs and living, their businesses are threatened.
A clear example is Petals and Syrup, a local beverage producing enterprise owned by 30-year-old Pearl Dodoo at Taifa in Accra. Pearl, who has been in the business for the past four years is at the moment contemplating folding up. In a span of almost two years, prices of most of her raw materials including; hibiscus leaves, mint leaves, ginger, pineapple, sugar, grapes, strawberry, honey have shot up more than 300 percent.
For instance, a ‘Margerine tin' of sugar, which used to sell at GHC10 is now GHC45. Hibiscus leaves now sell at GHC40 from GHC8. The high cost of honey has compelled her to switch to sugar, which is relatively cheaper.
“The business is actually on a time bomb. I feel grace is what is keeping me at the moment,” she complained as the news team joined her on one of her usual daily routines to buy her raw materials from the Dansoman market.
Currently, the high price of strawberry has compelled her to remove the almost scarce fruit from her flavours. “At the end of the day, customers still expect quality in products, but you also can't reduce the quality because things are expensive. To be honest, if I want to factor in the price changes, consumers may not be able to afford anything I sell,” Pearl lamented.
In all these, the quest is to survive and so Pearl is gradually moving into other things that are not capital intensive. So, she helps people to plan events like weddings, parties, picnics, birthdays and engagements. She is calling on government to ensure conditions that support entrepreneurship are enhanced. This, she explained, can be done through effective and sustainable policies.
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Bags are essential for human activities. Producing bags is capital-intensive and this is what 29-year-old Desmond Larkai has been doing for the past three years. What has kept him going is the sheer determination to succeed. Although he admits the high cost of raw materials including; leather, glue, zips, foam, accessories and fabric, Desmond indicated that he has strategized in ways that will keep his business afloat.
Compounding the situation is high utility rates. In the last three weeks alone, he spent almost GHC1,000 on electricity. “I haven't gotten to the point of quitting. As a businessman, you need to have a plan, because when the dynamics shift, you cannot be using your old formula to work a new solution and so you need new formula, new solution to tackle current situations. It is true the system is hard, that is why you need to come up with a solution that will fit you and run with it.”
Mr. Larkai has no plans of laying off any of his five staff. He has actually made little adjustments in salaries for them. To help the staff further, he has cancelled weekend work to enable them explore other opportunities that will fetch them extra income.
Moving himself around is quite expensive, he mentioned. Especially so, in his 2010 Honda Civic due to high fuel prices. Sometimes he uses commercial vehicles popularly referred to as ‘trotro.' He recounted a day when he had 3 meetings and a quick check revealed an expenditure of GHC120 using his personal car and GHC25 using ‘trotro.' Eventually, he chose to use ‘trotro,' which made him save GHC95.
Instead of complaining about the current hardship in the country, he prefers to use that energy to strategise. “Yeah things are high, but is it only Ghana? No! It is a global thing, so how are others averting what is imminent here? It is through strategic planning.”
While inflation currently stands at about 40 percent, the Bank of Ghana has retained the interest rate at 30 percent, hoping for improvement in subsequent months.
Ghana's growing entrepreneurial spirit and talented individuals starting businesses necessitate that government develops enabling policies to maintain the momentum.
The high cost of inputs is biting on the profitability of businesses. Whilst some are contemplating on folding up, others are strategizing to stay in business. Whichever side you find yourself as an entrepreneur, you just need to strike a fine balance.
By George Kwanning