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The UK-Ghana Chamber of Commerce (UKGCC) has released its “Ghana Business Environment and Competitiveness Survey Report” for 2022, giving a comprehensive snapshot of Ghana’s business climate.

The report covers various topics such as business confidence, as well as challenges UK companies face in Ghana, including corruption and lack of transparency.

This fourth edition of the survey had 306 businesses taking part, up from 47 in 2021, and they ranged from small to large companies covering 16 industries.

As with previous years, the study sought to assess the situation of businesses in the second half of 2022 and their plans and expectations for the near future in terms of challenges and opportunities in Ghana. Overall, companies are optimistic about operating in Ghana but highlight challenges.

Regarding costs, respondents showed they were lower when acquiring skilled labour and sourcing raw materials locally. They also saw improvements in land cost and availability of logistic partners. These lower costs were also reflected in the previous year’s survey.

With technology on the march globally, respondents cited the availability of advanced technology and telecom facilities as economic drivers that have improved business in the last five years.

In contrast to 2021, when respondents said businesses were not prepared to take advantage of the African Continental Free Trade Area (AfCFTA), the responses to the 2022 survey showed that business investment plans increased. In their response, 34% say they want to expand their capital base, and 18% want to develop appropriate quality standards.

Businesses looking to increase production stand at 15%, with the same percentage looking to increase operating costs. However, only 5% said they plan on networking with other businesses.

An encouraging sign for investors is that 31% of respondents said they saw improvements in the enforcement of legal contracts.

Amid the optimism, corruption continues to be a perennial problem casting a shadow and a primary concern for businesses. In key findings on doing business in the country, corruption moved from the second spot in 2021 to the top in 2022.

It is no surprise that corruption was highlighted as the most declined business component over the last five years, as it has been rated amongst the top business challenges over the years.

Additional bottlenecks are the tax system and the cost of land and power, with fuel being the most expensive business cost.

Ghana’s economy faces headwinds such as inflation, price hikes, growing debts, and a weakening currency. A rating downgrade by Fitch and S&P hit the economy amid word of an IMF bailout. The local currency, the cedi, which has since gained value, was battered in 2022, dipping from 11.17 to 13.1 per US dollar.

Exports also remain a concern, but membership in Africa Continental Free Trade Area (AfCFTA) and the UK trade deal is expected to boost the sector. Some businesses are already taking advantage of AfCFTA. 

Fuel costs leading to high prices and high inflation hit foreign investment and purchasing power, along with regulatory hurdles and the high cost of doing business. 

Global challenges such as the Russia-Ukraine war, which derailed supply chains and caused price hikes and inflation, compounded the strain of COVID-19 on Ghana’s economy. But the country's economic indicators are expected to be in positive territory beyond 2022.

The main reforms respondents expect from the government are lower corruption and more transparency. They also expect the government to implement regulatory reforms and the safety & security of investment closely following. Ultimately, respondents expect the business environment to improve in 2023.

Slightly more respondents than in 2021 said they saw the Ghanaian business environment lagging behind other countries. Even though Ghana is still favoured for investments in Africa, ranking first in West Africa and 83rd globally according to Fitch Solution’s Trade and Investment Index, businesses deem other countries as performing better.

Results of our Ghana Business Environment and Competitive Survey Report show that the 2022 business environment has improved over 2021. However, corruption, the taxation system, and present economic obstacles continue to impede growth. Tap https://t.co/SX1m0NLVQU for the report. pic.twitter.com/z8sDvz70zD

— UK Ghana Chamber of Commerce (@UKGCC_ACCRA) February 7, 2023

“As complex as governance is, we trust that improvements in the business climate are possible and must be demanded. We look forward to next year’s survey to assess the progress made.” Vish Ashiagbor Country Senior Partner at PWC Ghana.

“PwC Ghana urges Government and other stakeholders to do more in addressing the problems and to sustain existing opportunities,” Ashiagbor added.

On his part, Anthony Pile MBE, Chairman of UKGCC, said, “The UKGCC is committed to promoting the interests of businesses in Ghana, and we are optimistic that the results of this report will serve as a reference and guide for government stakeholders, investors, businesses, and policymakers.”

Overall, the UKGCC survey report offers a clear snapshot of the opportunities and challenges of Ghana’s business climate. Ghana has made progress in growth and stability, translating into attractive investment opportunities for UK businesses. However, more work needs to be done to tackle challenges such as the high cost of doing business and the impact of COVID-19.

If these issues can be addressed, the country will remain attractive for UK businesses looking to set up or expand their operations in Ghana and Africa.

The UKGCC CEO in 2017, Tony Burkson, said at the time: “In the post-Brexit era, the UKGCC saw an increased interest in British businesses looking to do business in Ghana and West Africa.” 

He stressed at the time the need for the Ghana government to institute investor-friendly policies, saying that “this has a potential of making Ghana an investment hub in West Africa, where international companies will set up their headquarters as they trade with the rest of Africa.”

The 2022 report shows that Ghana has the potential to stay on a growth trajectory, as evidenced by the optimism of UK businesses despite the challenges. 

However, the country has more to do, and if the challenges, especially the perennial ones, such as corruption, are addressed, Ghana will continue attracting UK investors and businesses seeking to expand.

Top Photo: Golden Jubilee House, Presidential Palace, Accra - Ghana (Demerzel21 | Dreamstime)