In this Expert Insight, our business advisor in Ghana, Eric Osei, talks CFOs through some investment considerations for international businesses that want to set up shop in the West African country. He outlines the natural resources, investment incentives and advantages of doing business in Ghana.
- 10 reasons to do business in Ghana
- 9 potential investment sectors in Ghana
- How cultural and social factors impact your business in Ghana
- Business regulations & registration process in Ghana
Ghana is positioning itself as the gateway for trade and investment in West Africa, with favorable economic policies for investments and other viable business ventures. Over the years, it has attracted international businesses unto it shores, investing in major sectors to enhance the steady development of the economy. Foreign investors are active in agriculture (including processing, forestry and fishing), manufacturing, mining and oil and gas explorations, as well as the services sector.
With a stable political environment, Ghana is a great destination for investors, who are determined to explore and utilise the country's natural resources. The trade liberalisation within the Economic Community of West African States (ECOWAS) provides businesses with a market population of about 245 million in the sub-region.
Natural resources
Ghana has a lot of mineral resources such as gold, diamond, manganese, limestone, bauxite, granite, oil and iron ore deposits. In 2012, Ghana, the second largest producer of gold in Africa produced 3,166,483 million ounces of gold, while diamond production was about 215,118 carats. The Ghana Manganese Company exported 1,490,634 million tons of manganese and the Ghana Bauxite Company exported 752,771 tons of bauxite.
With about 1.6 million hectares of forest cover, Ghana's forests are arguably the best managed in West Africa. It has 282 protected areas covering a total area of 23,729 km² with 216 of them located within the high forest zone. Ghana is also the second largest producer of cocoa in the world after Ivory Coast. It is the third largest producer of timber and the second largest exporter of wood in the continent. Marine fishing resources (tuna and game fishing) are equally available. Ghana also has sunshine and wildlife, which attract tourists.
Advantages of doing business in Ghana:
- Availability of a stock exchange
- A good supply of trained and trainable labour
- Quota-free access to US and European markets
- Stable multi-party democratic environment
- Associate of the World Trade Organisation
- Access to the entire market of ECOWAS community
- Committed to the practice of market liberalisation policies
- Free Zone Board which promotes exports and offers tax exemptions
- Privatisation in major economic sectors
- On-going expansion of major infrastructures such, as the harbor and the airports; electricity and gas supply.
Investment incentives:
- Corporate tax - 8% on export income, 25% for hotels and 35% for others
- Location incentive - 25-50% tax rebates
- Tax holidays - indefinite for cocoa farming, 3-10 years depending on sector; 10 years for Free Zones with 8% corporate tax thereafter
- Tariff exemption - 100% duty exemption for production equipment
Investment guarantees:
- Investment laws which guarantee 100% transfer capital profits and dividends
- Multilateral Investment Guarantee Agency (MIGA) Convention
- Investment Promotion and Protection Agreements
- Double Taxation Agreements (DTAs) - to rationalise tax obligations of investors in order to prevent double taxation.
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