A cursory look at the cost profile of the AngloGold Ashanti (AGA) Obuasi mine reveals that the cost of electricity and the falling value of the cedi are two important contributors to the company�s current distress, according to Kwaku Kwarteng, the Member of Parliament (MP) for Obuasi West.
The AGA Obuasi mine directly employs about 4,300 workers, almost all of who are Ghanaians. However, the mining company has announced its intention to lay off the vast majority of these employees. Mr. Kwarteng lamented: �AGA is yet to give exact figures, but it appears the company will retain only some 600 of its current workforce. This means some 3,700 workers will be going home, albeit with their severance awards. This figure does not include contractors who may lose their contracts and therefore lay off their workers as a result of the crisis.�
The company has assured the people of Obuasi that within 18 to 24 months, they expect to complete the restructuring needed to address the current challenges of the Mine, and after that, they will re-employ people. The Obuasi community, he noted, had a positive interest in AGA recovering from its current difficulties, and wished the company well. But the fact remains that nobody knows the future, and we have good reason to be worried about events in Obuasi and anxious about what is yet to come, Mr. Kwarteng noted.
In term of taxes to the state, the company�s books indicated that last year it paid a total of about GH�200 million to the state by way of taxes, royalties, and dividend payments. Furthermore, the problems of AGA are not isolated. Tema, Ghana�s industrial hub, is a pale shadow of its former self. Last month, Tema Chemical Limited announced plans to lay off 400 workers, the NPP MP added.
Mr. Kwarteng was quick to indicate that Super Paper Products Limited folded up completely, while most companies in Tema had folded up or were in serious distress. He observed: �But it is not just Tema; in the last quarter of 2013, Blue Skies Products (Ghana) Limited in Nsawam laid off 400 workers. The list is endless.�
It is disheartening listening to industry. The Association of Ghana Industries� Greater Accra Regional Chairman, Mr. Humphrey Ayim-Darke, lamented: �We don�t see an end to the crisis. We are not inspired, and there�s no hope being communicated to us in terms of what will be done in the short-term and the medium and long term. The mood among businesses is absolute frustration.�
The Private Enterprise Federation�s Chief Executive, Nana Osei-Bonsu, feels the same: �We don�t see the road ahead; we don�t know the policies that will be put together to lift us from where we are.� And the national figures reflect this negative trend and mood. In the second quarter of 2013, Ghana recorded GH�2,281 million worth of industrial activity in real terms. In the third quarter, this reduced to GH�2,057 million. In the fourth quarter, it reduced further to GH�2,030 million.
Mr. Kwarteng said the government could not be responsible for all the factors contributing to this industrial decline, but stressed that a responsive government attitude to industry can save many of the suffering companies. He expressed his displeasure with the current government�s appetite for spending more money than it has. This, he noted, would only lead to further depreciation of the cedi, especially so, when we look on while the industries that should produce and bring in foreign exchange fold up.
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