The economy of Ghana has gone through tremendous growth in the past few years, as a reuslt it has been largely held up as a model by which other African countries can follow and emulate. This leads to the question, how is doing business with Ghana? It’s a fact you’ll need to find out if you’re considering doing business in or trading with businesses in Ghana. For the year 2010, Ghana posted a whopping growth rate of approximately 14% or more than 7 times the US economy. While the Ghanaian economy may be nowhere near the size of the US, the high growth rate make Ghana a promising market for the future.
Ghana’s Growing Economy and Its Positive Affect on Business in Ghana
In fact, the economy of Ghana was listed as The World’s Fastest Growing Economy in 2011 in economic research led by Economy Watch with data coming from the IMF’s tracker of GDP Growth in constant prices in the national currency (not converted to US dollars), with an economic growth predicted to be about 20% in 2011. As a result, Ghana has become a Middle Income Economy and has more than twice the per capita output of the other countries in West Africa. This success story is largely a result of more stable government, that has provided the people of Ghana, more opportunity to grow and work rather than worry about war and famine.According, to the 2009 Failed States Index, Ghana is the 53rd least failed state in the world. Ghana’s political and economic stability, low crime rate, and wide use of English make the country an attractive entry point to West Africa for foreigners. Some areas of promise for businesses would be import-substitution industries such as textiles, steel, tires, oil refining, flour milling, beverages, tobacco, simple consumer goods. While a large portion of the domestic economy continues to revolve around subsistence agriculture, which accounts for 35% of GDP and employs 55% of the work force, there is a growing services sector for foreign businesses to expand into. Tourism has become one of Ghana’s largest foreign income earning industries (ranking third in 1997), as a result the Ghanaian Government has placed great emphasis upon further tourism support and development. The financial services in Ghana has seen a lot of reforms in the past years. Ghana passed the Banking Act in 2007, which allows the awarding of General Banking licenses to qualified banks and this allows Offshore Banks to operate in the country. In fact, Barclays Bank has become the first bank in Ghana to be awarded the General Banking license in the country.
Therefore, it has become possible for non-resident individuals and foreign companies to open offshore Bank Accounts in Ghana. The mining sector also shows much promise since Ghana is well endowed with natural resources, especially the size of its gold reserves, as Ghana remains one of the world’s top gold producers. Other exports such as cocoa, oil, timber, electricity, diamond, bauxite,and manganese are major sources of foreign exchange. However, for all its positive advantages, the Ghanaian economy is facing some headwinds. Since, Ineffective economic policies of past military governments and regional peacekeeping commitments have led to continued inflationary deficit financing, depreciation of the Cedi (national currency of Ghana), and rising public discontent with Ghana’s austerity measures. Furthermore, according to the World Bank, Ghana’s per capita income has barely doubled over the past 45 years. Even so, Ghana remains one of the more economically sound countries in all of Africa. For investors and businesses looking to expand into Ghana’s economy, it makes most economic sense to invest in the mining, financial services, and construction sectors. Since, these are the sectors that are showing the most promise in Ghana currently. There is also a growing market for cheap consumer goods, since Ghana is considered a middle income country. Feel free to message me at email@example.com
if you have any more questions on doing business in Ghana and its economy.