Ghana Is Open For Business
It is official, Ghana is open for business. The World Bank's – Doing Business in 2006 – study ranks 155 countries over 10 categories. In the West African sub region where Ghana has branded itself as the “Gateway”, the country is ranked first in 4 categories – 'Ease of Doing Business, Protecting Investors, Paying Taxes and Enforcing Contracts'.
However, the study also shows that it is easier to start a business in war ravaged Sierra Leone than it is in Ghana. Dealing with licenses in Ghana takes an average of 71 days, Senegal ranks best in ECOWAS with 68 days. For companies and individuals in Nigeria, the sub region's largest economy, hiring and firing employees takes 27 days, Ghana follows with 48 days. It is easier to register property in the French speaking countries – Benin comes in first with 72 days, drought torn Niger follows with 90 days, in Mali it takes 91 days. But in Ghana, it takes a crushing 120 days to wade through the maze of bureaucracy and register property.
In the ECOWAS regions, trading across borders continues to take weeks instead of hours. It takes 46 days in Senegal, 85 days in Sierra Leone, 99 days in Togo, 104 days in Benin and 108 days in Ghana. Ghana is the second easiest place to close a business (79 days) behind Nigeria (61 days) but ahead of Guinea (81 days) and Senegal (97 days).
Ghana's economy grew to 5.8% in 2005 and is expected to inch marginally up to 6% in 2006. However if this government wants to deliver positive change in something other than promises, the economy must grow at 8%.
When asked if Ghana is really open for business, a source from the private sector said, “all the macroeconomic issues are being taken care of and there is stability in the market place. Furthermore, interest rates as well as inflation are declining.” The source continued by stating that “people claim that there is no money in their pockets, macroeconomic stability not withstanding. But, the money in their pockets in the past was money with lower purchasing power because of inflation. Now, with price stability, the money in their pockets can go much further. “
Another private sector commentator stated that, in his business, “he now records foreign exchange gains when opening letters of credit while in the past he recorded foreign exchange losses. These gains are due to the strengthened cedis against other currencies.” The Message – not to take for granted the impact macroeconomic stability has on businesses.
Therefore, a stronger macroeconomic environment is strengthening businesses within Ghana. However, success can not entirely be measured by individual businesses that claim triumph and cheer that Ghana is now open for business. True success comes from a simple statistic – the economy must grow at 8%. Statistics tell it all.
In a World Bank meeting this month, President John Agyekum Kufuor observed that Ghana's economy was growing, but that, he was “still not satisfied.” The target is to be a Middle Income Country by 2015. And you cannot get there on the back of a growth rate of 6% or less.
President Kufuor holds firm to his belief that this era is the “Golden Age of Business” and that the private sector will be the engine of growth for the Ghanaian economy. In February, the Ministry for Private Sector Development and President's Special Initiatives will unveil a composite work plan, a time bound and fully budgeted program that essentially details who is responsible for doing what, where and when to improve the environment in which companies local and foreign do business in Ghana.
The Ministry coordinates pro-private sector policies of 17 Ministries, Departments & Agencies such as Trade, Agriculture, Roads Transport, Customs, Land Administration, Attorney-General, and Registrar-General, to name a few. The Minister for Private Sector Development and PSI Kwamena Bartels remarked that monitoring these policies of the 17 MDAs are aimed at the “overall development of the private sector.”
While Ghana may be 'open for business,' it also needs to be ready for business. The business environment must continue to be enhanced with improved regulations on Starting a business; Dealing with licenses; Mobility of labour; Registering property; Accessing credit; Protecting investors; Paying taxes; Facilitating cross border trade; Enforcing contracts; and Closing a business. These are the challenges and focus areas for the Government's Private Sector Development Strategy and World Bank's 'Doing Business in 2006' report.
And, which businesses benefit from the implementation of these pro-private sector policies? All. All businesses from multinationals to corporate to sole-proprietors to small and medium-sized enterprises are suppose to benefit from the coordinated efforts of MDAs pursuing pro-private sector policies. Pro-private sector policies are intended to reach all four corners of Ghana, regardless of the size of the business. Pro-private sector policies are to enhance the successes of all businesses, and the successes of these businesses are to enhance the country's economic growth.
A figure of 8% growth tells us, as a nation, that we are on the right path. The constant tie between business and government policies to reach this 8% goal is widely apparent. Greater dialogue and partnerships between the two must be promoted in order for Ghana to reach her goals.
While Ghana has been described as not only the gateway to West Africa, but the gateway to Africa as a whole, inefficiencies that hinder business within Ghana must fervently be discouraged. The World Bank study shows Ghana as a leader and as an example among our ECOWAS neighbours. However, while much has been achieved, much more needs to be done.