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| Business in Ghana |
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| Economy |
The economy is coming out of a very turbulent two-year period but today, the domestic economic situation is decidedly different. The economic aggregates and indicators are pointing in the right directions. Inflation is coming down, interest rates are easing downward, exchange market volatility has diminished. 
Macroeconomic policies have shifted from one of considerable fiscal relaxation and monetary accommodation to one of fiscal stringency and monetary restraint. The rigorous implementation of the fiscal framework along with the price adjustments to utilities, petroleum and other services introduced in the interim budget explains the observed stability in the foreign exchange market.
The first tangible benefit of HIPC is already being felt in an improved cash flow position. The greatest benefit is yet to come in the form of a deep reduction in the stock of debt from its presently unsustainable levels, releasing funds for social sector spending programs.
Well endowed with natural resources, Ghana has twice the per capita output of the poorer countries in West Africa. Even so, Ghana remains heavily dependent on international financial and technical assistance. Gold, timber, and cocoa production are major sources of foreign exchange.
The domestic economy continues to revolve around subsistence agriculture, which accounts for 41% of GDP and employs 60% of the work force, mainly small landholders. |
| Finance |
The Republic of Ghana has a Central Bank, the Bank of Ghana and the Commercial Banks, merchant banks, investment banks and development banks.
Some of these banks are the Standard Chartered Bank and Barclays Bank, the Merchant Bank, Prudential Bank, the SSB Bank, the National Investment Bank, and the Agric Development Bank.
Inflation has fallen from a high of 40.9 per cent in 2000 to 14.3 percent In 2002 and interest rates which in 2000 was 47 per cent is now 24.5 percent. |
| HIPC Initiative |
In 2001, due to depleted government coffers when a new government took over, the new government decided to go HIPC to enable it accrue some money for development without which it could not achieve much.
In March 2001 the Government of Ghana took a bold decision to take advantage of the Enhanced Highly Indebted Poor Countries (HIPC) initiative. That decision has already borne fruit in the past year. Once the eligibility of Ghana to apply for HIPC relief had been established, the government was able to suspend debt service payments to bilateral donors which brought budgetary savings of about US$190 million i.e. ¢1,368 billion in financial year (FY) 2001.
Out of the approximately US$100.0 million savings from the enhanced HIPC debt relief, government has decided to use US$20.0 million to reduce its domestic debt and the balance of US$80.0 million on poverty reducing programmes and activities.
For 2002, HIPC benefits consist of US$153.0 million in traditional debt relief and US$96.0 million from Enhanced HIPC debt relief.
Aside the banks are agencies, departments and organisations, which also deal with income and earnings. |
| Industries |
The Association of Ghana Industries (AGI), Ghana's premier voluntary business association has come a long way from its humble beginning when it was established in 1958 and had a membership of just some 10 Ghanaian Manufacturing Industries. Today, The AGI has grown to a national organization with an active membership of more than 300 made up of small, medium and large scale manufacturing industries. Its members are also in support service industries such as transport, construction, utilities information technology, telecommunications, banking and advertising. 
AGI's mission is to carry out proactive support services for the industrial sector with a view to contributing substantially to the growth and development of industry in Ghana. Its objective, therefore, are to seek to provide a central organization for the promotion of the interest of industry: study, support and influence legislative or other measures, which are considered favourable for industry. It also exists to oppose those which are considered inimical to growth of industry; consider all issues connected with industry in Ghana and present the views and suggestions of industry to government and all stakeholders; and deliver quality service to member companies, particularly small and medium scale enterprise towards bringing about improvement in their performance.
For more information on the Association of Ghana Industries visit their website on www.agi.org.gh |
Investment Climate |
The economy of Ghana has undergone a remarkable transformation. The economic management program embarked upon in a rather challenging environment of the 80's has re-engineered the Ghanaian economy, which has since registered an average growth rate of 5% per annum. The consistent growth rate of the economy has laid the foundation for social stability and international credibility. Amendments to Ghana's 1985 investment code have opened up a wide range of new business opportunities. The 1994 Ghana Investment Promotion Act guarantees the freedom for non-Ghanaians to establish and run enterprises in potentially lucrative areas such as natural gas, hydropower projects, fruits and vegetables farming, food processing including fish canning; production of agro-chemicals, pharmaceuticals and information technology. The government's privatization initiatives also open up a number of sectors for new business partnerships and investment, notably the banking and the state petroleum and telecommunication s sectors. Tourism is an especially strong area for a new business projects. Key opportunities in this sector include: tourist accommodation, particularly beach resorts; tourists transportation, catering enterprises, eco-tourism, night life and leisure and tourist servicing enterprises. As a result, renewed private sector activity is increasing and attracting foreign investment in a growing number of strategic areas, notably mining, manufacturing, telecommunications, real estate development and financial services.
Among the factors responsible for this trend has been the adoption and implementation of sound macroeconomic policies and the enactment of more liberal investment legislations. These legislations seek to free the investor from bureaucratic constraints and provide facilitating mechanisms to reduce costs associated with delays in implementing projects. One such legislation is the Ghana Investment Promotion Centre Act, 1994 (ACT 478), which re-established the Ghana Investment Promotion Centre (GIPC) as an autonomous government agency mandated to encourage, facilitate and promote domestic and foreign investment. |
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