Ghana’s banking sector reforms has been stated as the main factor in low sales at the country’s largest producer and retailer of consumer goods, Unilever Ghana.
Unilever An email sighted by JoyNews indicated that Unilever Ghana Limited said that “many distributors finding it increasingly difficult trading.”
The email indicated the “economic climate in Ghana has seen a slow-down especially in trading conditions particularly after the banking sector reforms which began in Q4 2018.”
It added that the business is experiencing “a more subdued consumer demand.”
The banking sector reforms started in 2017 when the Bank of Ghana revoked the licences of UT and Capital banks. A year later, five more banks collapsed.
The reforms in the banking sector led to reducing in the number of camps to 23 by 2019.
Meanwhile, the BoG also in May 2019 moved to also sanitise the microfinance sector. It revoked the licences of 386 companies which it said were insolvent.
The reforms also led to the loss of jobs in the sector. According to the government, at least 1,698 lost their jobs after the five banks collapsed in 2018.
Unilever said the marginal decrease in demand together with the reforms has seen the company’s distributors posting “unusually high inventory levels.”
The company said it was bracing for a “considerably lower than planned” turnover in its outlook for the rest of 2019.
In reaction, UGL said it has decided to “reset the levels of stock held by distributors over the coming months.”