Doing business anywhere in the world can have its benefits and challenges, but what are some of the pros and cons of doing business in Ghana specifically? How manageable is it and what is the ease of doing business here? What are some of the challenges you may encounter or should be ready to face?
In this article we will speak about some of the advantages and disadvantages of doing business in the country of Ghana.
Pros of doing business in Ghana
Growing youthful population
According to a Statista report on the growth of youth population in Ghana, there has been an increase of 172 thousand young people aged from 14 years onwards, compared to 2019.
The availability of young emerging adults who are ready to learn and grow offers the opportunity of incorporating young and dynamic staff into your business who can be trained as per your requirements.
Programs such as the Technical Vocational Education and Training Program imparted by the NGO Chance For Children, which have the objective of training young adults in a certain business sector so they can gain the necessary knowledge and skills in order to improve their quality of life, is an example of a great initiative that also helps reduce unemployment rate in Ghana.
Ghana’s safety is high compared to other African nations
Ghana has ranked as the second safest country in Africa by the Global Peace Index 2022 report, after Mauritius who is ranked as Africa’s safest country.
On a global vision, Ghana is 40th amongst 83 countries worldwide (with a score of 1.759). Given these figures, Ghana provides a high standard of peaceful environment for business and has sustained political stability, allowing the country to make gains in socio-economic activities such as business, healthcare and housing.
Competitive/growing business environment
Although the unemployment figures in Ghana are still pretty high, this has also encouraged a slow but promising growth of self-employment as well as the creation of Ghanaian start ups, ranking as number 3 for start ups in West Africa, specially for Fintech, Software and Data and Foodtech startups.
This growth is thanks to several strengths, including significant consumer and business markets, sophisticated entrepreneurial talent, and a strong corporate sector. All this shows that Ghana has very good potential for investing in the country.
Business friendly environment
Ghana is considered to be the “Gateway to Africa”, not just because of its strategic position but also because it is considered as a great place to initiate yourself in Africa if you have never lived here before.
One of the reasons is due to the hospitality and friendliness of Ghanaian people. This is also perceived within a business environment where locals really appreciate the importance of business/having a job and are mostly very open and receptive towards new business ventures.
Endowed with rich natural resources
Ghana is the second largest African producer of gold and worldwide, is the second largest cocoa producer.
It is also the third largest producer of timber and the second largest exporter of wood and wood products in Africa. It possess extensive forests, approximately 11% of the country is occupied by forests.
These are a few examples of the availability of natural resources which can open countless opportunities for developing value chains.
Cons of doing business in Ghana
Economic crisis and depreciation of the Ghana Cedi
In 2019, Ghana had the world’s fastest-growing economy after it doubled its economic growth.
Unfortunately it is currently battling its worst financial crisis in decades with inflation reaching at a record 50.3 percent, the highest in 21 years.
Due to the business nature of Ghanaian traders who mostly buy and sell products from Western countries and China (which led to persistent strong demand for the US dollar to pay for imports), it led to a continuous depreciation of the local currency.
The prediction for 2023 by the UK based Economist Intelligence Unit (EIU) is about a 22% depreciation of the Cedi against the dollar. This will rank the local currency as the 3rd worst performing currency on the African continent.
Battling cultural differences at work
Punctuality is not one of the strengths in Ghanaian people. This is why you will always hear people speaking about “Ghana time”. This can be pretty frustrating at first, especially if you come from a country where punctuality is a key element.
Sometimes there can be miscommunication arising from cultural misunderstandings. Although there are an increasing number of Ghanaian people highly proficient in English, it is uncommon to find someone who doesn’t understand the subtleties of the language and possesses a strong enough understanding of both the English and foreign languages.
In general, the use of ghanaian slang words in everyday conversation is very common, so knowing them is always a plus.
Culturally the country is very different, this includes the working environment, so patience and being understanding of the cultural differences is very important if you want to succeed. Adapting to life in Ghana is the first step necessary to break down the cultural barriers.
Making connections with other expats always helps too.
Time-consuming bureaucratic tasks
The lack of a strong rule of law and an inconsistent application of regulations means that processes such as opening a bank account, registering your company, gaining product approval, amongst others, can drag on for months and can be pretty frustrating.
This also includes many procedures that would be handled electronically require reams of paperwork which need to be filled in and stamped by hand. It is highly recommended you have a good administrative team (or person) in place, who know all the in’s and out’s and are able to handle all paperwork and procedures.
If you want to get acquainted with the large spectrum of companies in Ghana, be sure to check the following Ghanaian businesses: