Market Entry Advisors – Ghana

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Ghana

Ghana is one of the more stable nations in sub-Saharan Africa, with a good record of power changing hands peacefully.

It has been designated as one of EDC’s five priority countries in Africa and is known for offering specific opportunities for Canadian companies. In 2014, Ghana was Canada’s fourth-largest market for merchandise exports in the sub-Saharan African region. And from 2000 to 2014, two-way merchandise trade increased by 145.6%. In 2014, Canadian exports to Ghana totalled more than $157.3 million. Top exports included cereals, vehicles and parts, machinery, and textiles.

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Second-largest cocoa producer in the world, after the Ivory Coast.

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Second-largest gold producer in Africa, after South Africa.

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The first country in Africa to receive development assistance from Canada (in 1957).

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Overview

Joël Dido

Regional Manager – Africa,
International Business Development Group, EDC

“In Ghana, personal relationships come first and business will follow. When you are on your first visit, take the time to get to know the people and build a relationship with them rather than trying to speed up the process and go directly to the business discussion.”

Where can Canadian businesses find opportunities in Ghana?

The mining sector is important – Ghana is Africa’s second-largest gold producer – along with related industries, such as mining equipment and service companies, engineering companies, infrastructure, planning, consulting, transportation and project management. There is also a huge need for power – everything from generation to transmission and distribution – not only in Ghana but in Africa in general. This includes hydro, solar, biomass and other sources of power. Additional potential can be found in ICT and infrastructure, like roads, construction and ports.

What factors are driving these opportunities?

Traditionally, Ghana has been a mining and agricultural country. Then, in the late 1990s, the country discovered some oil and gas fields. That boosted economic opportunities. Another factor would be the political stability. Ghana has been through four different elections without any major disruptions.

What are your top “dos and don’ts” for Canadian businesses?

In Ghana, personal relationships come first and business will follow. When you are on your first visit, take the time to get to know the people and build a relationship with them rather than trying to speed up the process and going directly to the business discussion. It’s also a hierarchical society. This means you will be judged first on your appearance and then on your age, as people will equate this with the experience they think you have. So, if you send your junior guy, people won’t regard this as a serious way of doing business. And you cannot expect to build a business in Ghana from Canada, you have to go there and be on the ground.

Legal/Regulatory

Azanne Kofi Akainyah

Partner at A&A Law Consult

“Any foreign business familiar with English and North American business and regulatory practices will find no challenges in the Ghanaian environment as long as it secures knowledgeable local lawyers to advise and assist.”

How would you describe the legal and regulatory environment for foreign businesses?

As a member of the English-speaking Commonwealth, Ghana’s legal system is based on English Common Law, statutory enactments and local customary law. Its business and regulatory environment is almost wholly derived from the English model. Any foreign business familiar with English and North American business and regulatory practices will find no challenges in the Ghanaian environment as long as it secures knowledgeable local lawyers to advise and assist. Although there is generally no anti-foreign bias in Ghanaian law and regulatory regimes, there is a policy in certain sectors to encourage local content, such as in the extractive sector and with businesses that intend to engage in commercial trading.

What are potential regulatory and legal challenges?

The greatest difficulty for businesses (local and foreign) is bureaucratic inertia and a lack of co-ordination between various government departments. These cause serious delays, leading to increased costs as well as the encouragement of corruption. Although the government has embarked on an e-government system to ensure that several administrative processes are computerized and can be accessed on the web, the pace has been painfully slow. Finally, court proceedings even for relatively simple disputes can be lengthy and convoluted, court staff may at times demand facilitation fees and it does appear that labour is prone to litigation and that during such disputes the National Labour Commission and the courts tend to exhibit a bias in favour of local workers.

Are there any noteworthy developments in the local legal landscape that businesses should know about?

Since the beginning of the year a new government is now in power. The policies of the NPP government include the vigorous encouragement of the private  sector and the elimination of bureaucratic barriers and corruption.

Strategy

Alexandra Wrage

President and Founder of TRACE International

“It is not uncommon in Ghana to experience a high degree of petty forms of corruption, especially among the police and bureaucratic officials in the customs and tax administrations.”

How can companies identify red flags for corruption specific to Ghana?

Corruption in Ghana can take many forms, ranging from petty bribery to more large-scale graft. To the greatest extent possible, companies should avoid signing any contract with false urgency or under duress without heightened scrutiny, as these may point to underlying impropriety. Companies should also pause before doing any business with companies operating in Ghana that are registered in known tax-haven countries. As in any international business context, business partners should have demonstrated technical and financial capability to justify their retention.

What are the top risks companies are exposed to when it comes to corruption?

It is not uncommon in Ghana to experience a high degree of petty forms of corruption, especially among the police and bureaucratic officials in the customs and tax administrations. The potential for corruption also exists in Ghana’s gold-mining sector, and small-scale corruption has fuelled an underground, unlicensed mining and gold trade, known locally as galamsey. The recent discovery of large quantities of oil and gas in Ghana’s offshore waters has opened the door for more large-scale corruption risks in that sector as well.

What anti-bribery compliance support is available in Ghana?

Consistently ranking high among global indicators for freedom of the press and freedom of speech, including in the TRACE Matrix, a global business bribery risk index, Ghana has an active civil society with numerous watchdog and media organizations dedicated to addressing bribery within the country, such as the Ghana Integrity Initiative (a local chapter of Transparency International), the Africa Centre for Energy Policy and the Ghana Anti-Corruption Coalition. Additionally, international organizations, such as PYXERA Global and Invest in Africa, are leading capacity-building initiatives on the ground that incorporate compliance into their programs. TRACE partners with these organizations to train and certify local small and medium-sized enterprises on anti-bribery best practices. TRACE held a full-day training workshop which was open to the public in Accra on January 21, 2016. Contact Ms. Melanie Habwe Dickson, J.D. for future workshops.

Human Resources

Michael Kuma Avuglah

Chief Executive Officer, Ghana HR Solutions

“Ghana has a very open system for expatriates, which allows companies to send employees from their countries of origin.”

What’s the labour market like in Ghana?

We have plenty of local expertise, particularly in accounting, financial services, auditing and legal. There are also a good number of people in Ghana who have worked for multinationals. However, if you’re looking to hire a country manager, there’s a smaller pool of people to choose from because many of the candidates for this type of role are now working for the NGOs here. Ghana has a very open system for expatriates, which allows companies to send employees from their countries of origin. If you can prove that you searched the local market and could not find anyone qualified for the job, then it’s fairly easy to bring in expat employees. They can stay for up to two years with the condition that they train local staff to help them develop the necessary skill set.

What is some of the key information Canadians need to know about employee compensation in Ghana?

We have a very weak currency, so more and more workers are now trying to take their salary as a dollar rate. At any point in time when the local currency devalues, they get the dollar equivalent. Employees here expect a minimum of 15 days paid leave. Top-level employees expect medical coverage for themselves and at least three of their dependents.

How would you describe the workplace culture in Ghana?

Workplaces here are not very well structured, and it’s normal for people to decide they don’t want to come to work on a certain day because they were up late watching a TV program. As an employer, you have to go out of your way to monitor your people and learn to negotiate with them, maybe convince them to come in late rather than not coming in at all. Of course, this is not the case with higher-level personnel, who typically have had a western education and have experienced western work culture.

Partnerships

Mervyn Pinto

President & CEO, Minaean SP Construction Corp.

“Canadian businesses get a lot if respect in Ghana. The Canadian government has provided significant development assistance since 1957 and the relationship between our governments is very strong.”

Where do you see partnership opportunities for Canadian businesses in Ghana?

We look after infrastructure projects in Ghana and partner with a number of Canadian companies that bring different areas of expertise. We see a lot of opportunities in Ghana as well as all over Africa, where there is not only the potential for infrastructure development but also the need for support. While we focus on housing and hospitals, we are looking to expand our execution capabilities to hospitality, renewable energy and water treatment, for example, since Ghana has a big problem with water contamination.

What can give Canadian companies an advantage?

Canadian businesses get a lot of respect in Ghana. The Canadian government has provided significant development assistance since 1957 and the relationship between our governments is very strong. This helps in moving projects forward. And since there is limited awareness about opportunities in Africa in many western countries, people who make an effort to get to know the place and travel there have a head start.

What are some of the challenges Canadian businesses can encounter?

Every business has to analyze the risks and rewards of going into a market like Ghana. One of the problems that exporters need to be concerned about is the rate of devaluation of the currency over the last five years. When I travelled to Ghana in 2010, the exchange rate for the Ghanaian cedi was 1.3 to $1 (U.S.); today is it 4 to $1 (U.S.). Another important consideration is the financing aspect and finding the right financial institution, like HSBC or Wells Fargo, which have offices in Ghana. There needs to be a structure set in place and that’s where EDC or the Canadian Commercial Corporation can help.

Export Development Canada does not endorse or favour any organizations listed above and is not responsible for the actions of those parties.

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Market Entry Advisors – Ghana was last modified: May 22nd, 2018 by Export Development Canada.
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