Navigating a difficult business environment.
Recent deterioration in the economic environment has constrained the capacity of businesses to pursue growth and other expansionary strategies. In these difficult times, the models and strategies of businesses are being tested for effectiveness and ability to outlast the deteriorated economic environment. This, we believe, calls for businesses to strongly consider “Restructuring” as a strategic option to improve or modify their operating and financing models in response to the difficult business environment.
This article highlights the recent economic downturn in Ghana and its impact on businesses. But more importantly, it also introducers readers to the concept of business restructuring and presents the various restructuring options available to a business over its maturity lifecycle. The article is mainly intended to highlight business restructuring as a strategic tool that can be leveraged by struggling businesses to Respond, Recover and Thrive amid the difficulties. `
The economic/business environment in Ghana has deteriorated over the last three years.The unfavourable economic climate has reflected mainly in the form of declining growth(GDP), rising inflation, high interest rates, and depreciation of the local currency. The combination of these has translated into increased cost of debt, input price hikes, growing overhead costs, and reduction in purchasing power/demand. These have resulted in a squeeze in profit margins for businesses, as well as severe cashflow and liquidity challenges in some
instances. In these difficult times, the models and strategies of businesses operating in Ghana are being tested for effectiveness and ability to outlast the deteriorated economic environment. In response, businesses must assess the strategic options available to them and make the necessary adjustments.