6. Financial Sector
Private sector growth in Ghana is constrained by financing challenges. Businesses continue to face difficulty raising capital on the local market. While credit to the private sector has increased in nominal terms, levels as percentage of GDP have remained stagnant over the last decade, and high government borrowing has brought interest rates above 20 percent and crowded out private investment.
Capital markets and portfolio investment are gradually evolving. The longest-term domestic bonds are 20 years, with Eurobonds ranging up to 41-year maturities. Foreign investors are permitted to participate in auctions of bonds only with maturities of two years or longer. In January 2022, foreign investors held about 16.6 percent (valued at USD 5 billion) of the total outstanding domestic securities. In 2015, the Ghana Stock Exchange (GSE) added the Ghana Fixed-Income Market (GFIM) – https://gfim.com.gh/, a specialized platform for secondary trading in debt instruments to improve liquidity.
The rapid accumulation of debt over the last decade, and particularly the past three years, has raised debt sustainability concerns. Ghana received debt relief under the Heavily Indebted Poor Country (HIPC) initiative in 2004, and began issuing Eurobonds in 2007. In February 2020, Ghana sold sub-Saharan Africa’s longest-ever Eurobond as part of a $3 billion deal with a tenor of 41 years. At the end of December 2021, total public debt, roughly evenly split between external and domestic, stood at 80 percent of GDP, according to the Bank of Ghana, partly as a result of the economic shock of COVID-19 as revenue declined and expenditures spiked.
The Ghana Stock Exchange (GSE) has 36 listed companies. Both foreign and local companies are allowed to list on the GSE. The Securities and Exchange Commission regulates activities on the Exchange. There is an eight percent tax on dividend income. Foreigners are permitted to trade stocks listed on the GSE without restriction. There are no capital controls on the flow of retained earnings, capital gains, dividends, or interest payments. The GSE composite index (GGSECI) has exhibited mixed performance.
Banks in Ghana are relatively small, with the largest in the country in terms of operating assets, Ecobank Ghana Ltd., holding assets of about USD 2.3 billion in 2020. The Central Bank’s minimum capital requirement for commercial banks is 400 million (USD 57 million), effective December 2018. As a result of the reforms and subsequent closures and mergers of some banks from 2017 to 2019, the number of commercial banks dropped from 36 to 23. Eight are domestically controlled, and the remaining 15 are foreign controlled. In total, there are over 1,500 branches distributed across the sixteen regions of the country.
Overall, the banking industry in Ghana is well capitalized with a capital adequacy ratio of 19.6 percent as of December 2021, above the 11.5 percent prudential and statutory requirement. The non-performing loans ratio increased from 14.8 percent in December 2020 to 15.2 percent as of December 2021. Lending in foreign currencies to unhedged borrowers poses a risk, and widely varying standards in loan classification and provisioning may be masking weaknesses in bank balance sheets. The BoG has almost completed actions to address weaknesses in the non-bank deposit-taking institutions sector (e.g., microfinance, savings and loan, and rural banks) and has also issued new guidelines to strengthen corporate governance regulations in the banks.
Recent developments in the non-banking financial sector indicate increased diversification, including new rules and regulations governing the trading of Exchange Traded Funds. Non-banking financial institutions such as leasing companies, building societies, and village savings and loan associations have increased access to finance for underserved populations, as have rural and mobile banking. Currently, Ghana has no “cross-shareholding” or “stable shareholder” arrangements used by private firms to restrict foreign investment through mergers and acquisitions, although, as noted above, the Payments Systems and Services Act, 2019 (Act 987), does require a 30 percent Ghanaian company or Ghanaian holding by any electronic payments service provider, including banks or special deposit-taking institutions.
Ghana’s main sovereign wealth fund is the Ghana Petroleum Fund (GPF), which is funded by oil profits and flows to the Ghana Heritage Fund and Ghana Stabilization Fund. The Petroleum Revenue Management Act (PRMA), 2011 (Act 815), spells out how revenues from oil and gas should be spent and includes transparency provisions for reporting by government agencies, as well as an independent oversight group, the Public Interest and Accountability Committee (PIAC). Section 48 of the PRMA requires the Fund to publish an audited annual report by the Ghana Audit Service. The Fund’s management meets the legal obligations. Management of the Ghana Petroleum Fund is a joint responsibility between the Ministry of Finance and the Bank of Ghana. The minister develops the investment policy for the GPF, and is responsible for the overall management of GPF funds, consults regularly with the Investment Advisory Committee and Bank of Ghana Governor before making any decisions related to investment strategy or management of GPF funds. The minister is also in charge of establishing a management agreement with the Bank of Ghana for the oversight of the funds. The Bank of Ghana is responsible for the day-to-day operational management of the Petroleum Reserve Accounts (PRAs) under the terms of Operation Management Agreement.
For additional information regarding Ghana Petroleum Fund, please visit the 2020 Petroleum Annual Report at: https://mofep.gov.gh/sites/default/files/reports/petroleum/2020-Annual-Petroleum-Report.pdf .
8. Responsible Business Conduct
There is no specific responsible business conduct (RBC) law in Ghana, and the government has no action plan regarding OECD RBC guidelines.
Ghana has been a member of the Extractive Industries Transparency Initiative since 2010. The government also enrolled in the Voluntary Principles on Security and Human Rights in 2014.
Corporate social responsibility (CSR) is gaining more attention among Ghanaian companies. The Ghana Club 100 is a ranking of the top performing companies, as determined by GIPC. It is based on several criteria, with a 10 percent weight assigned to corporate social responsibility, including philanthropy. Companies have noted that Ghanaian consumers are not generally interested in the CSR activities of private companies, with the exception of the extractive industries (whose CSR efforts seem to attract consumer, government, and media attention). In particular, there is a widespread expectation that extractive sector companies will involve themselves in substantial philanthropic activities in the communities in which they have operations.
Department of State
- Country Reports on Human Rights Practices;
- Trafficking in Persons Report;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
- Xinjiang Supply Chain Business Advisory
Department of the Treasury
Department of Labor
Ghana’s national climate strategy is contained in the Ghana National Climate Change Policy published in 2013 and Ghana’s Nationally Determined Contributions (NDCs). The revised NDCs, submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in September 2021, outline Ghana’s strategies in various sectors regarding climate change. To reduce its carbon footprint and greenhouse gas emissions (GHG), Ghana aims to reduce carbon emissions by 64 MtCO2e through the adoption of 47 climate actions across 19 policy areas.
Although Ghana has not officially announced a policy to reach net-zero emission by 2050, policies are being designed to reduce energy and CO2 intensity driven by the transition to renewable and low-carbon energy sources. In December 2021, the government established the .National Energy Transition Committee to prescribe risk mitigation measures towards environmental sustainability. Policies introduced to reduce carbon emissions include the Liquefied Petroleum Gas (LPG) Promotion Policy, the Renewable Energy Master Plan, and improved charcoal stove distribution. Ghana has set a target of increasing the share of renewable energy (including hydropower capacity up to 100 MW) from 42.5 MW in 2015 to 1363.63 MW by 2030.
The government, however, does not include environmental and green growth considerations in public procurement policies for businesses aimed at preserving biodiversity, clean air, and other ecological benefits.
Corruption in Ghana is comparatively less prevalent than in most other countries in the region, according to Transparency International’s Perception of Corruption Index, but remains a serious problem, with Ghana scoring 45 on a scale of 100 and ranking 73 out of 180 countries in 2020. The government has a relatively strong anti-corruption legal framework in place, but enforcement of existing laws is rare and inconsistent. Corruption in government institutions is pervasive. The Government of Ghana has vowed to combat corruption and has taken some steps to promote better transparency and accountability. These include establishing an Office of the Special Prosecutor (OSP) in 2017 to investigate and prosecute corruption cases and passing a Right to Information Act, 2019 (Act 989) (similar to the U.S. Freedom of Information Act) to increase transparency. The President named a new Special Prosecutor in 2021 but the OSP still has not prosecuted a significant anti-corruption case. The Auditor-General, was appointed in an acting capacity in 2021 and was confirmed as the substantive Auditor-General in September 2021.
Businesses have noted that bribery is most pervasive in the judicial system and across public services. Companies report that bribes are often exchanged in return for favorable judicial decisions. Large corruption cases are prosecuted, but proceedings are lengthy and convictions are slow. A 2015 exposé captured video of judges and other judicial officials extorting bribes from litigants to manipulate the justice system. Thirty-four judges were implicated, and 25 were dismissed following the revelations, though none have been criminally prosecuted.
The Public Procurement (Amendment) Act, 2016 (Act 914) was passed to address the shortcomings identified over a decade of implementation of the original 2003 law aimed at harmonizing the many public procurement guidelines used in the country and to bring public procurement into conformity with WTO standards. (Note: Ghana is a not a party to the plurilateral WTO Agreement on Government Procurement). Nevertheless, complete transparency is lacking in locally funded contracts. There continue to be allegations of corruption in the tender process, and the government has in the past set aside international tender awards in the name of alleged national interest. The Public Financial Management Act, 2016 (Act 921) provided for stiffer sanctions and penalties for breaches, but its effectiveness in stemming corruption has yet to be demonstrated. In 2016, Ghana amended the company registration law (which has been retained in the new Companies Act, 2019 (Act 992)) to include the disclosure of beneficial owners. In September 2020, Ghana deployed a Central Beneficial Ownership Register to collect and maintain a national database on beneficial owners for all companies operating in Ghana. The law requires each person who creates a company in Ghana to report the identities of the company’s beneficial owners on the Beneficial Ownership Declaration form at the Registrar-General’s Department (RGD). There are different thresholds for reporting beneficial owners, depending on the sector the company belongs to and who the beneficial owner is. For the general threshold, a person who has direct or indirect interest of 10 percent or more in a company must be registered as a beneficial owner. A Politically Exposed Person (PEP) in Ghana who has any shares or any form of control over a company in any sector must be registered as a beneficial owner, while for a foreign PEP, shares must be five percent or more. For companies in the extractive industry, financial institutions, and businesses operating in sectors listed as high risk by the RGD, the threshold for reporting beneficial owners is five percent. Failure to comply with the requirements may attract a fine of up to 6,000 cedis (USD 856) or two years in prison, or both.
The 1992 Constitution established the Commission for Human Rights and Administrative Justice (CHRAJ). Among other things, CHRAJ is charged with investigating alleged and suspected corruption and the misappropriation of public funds by officials. CHRAJ is also authorized to take appropriate steps, including providing reports to the Attorney General and the Auditor-General in response to such investigations. The effectiveness of CHRAJ, however, is hampered by a lack of resources, as it conducts few investigations leading to prosecutions. CHRAJ issued guidelines on conflict of interest to public sector workers in 2006 and issued a new Code of Conduct for Public Officers in Ghana with guidelines on conflicts of interest in 2009. CHRAJ also developed a National Anti-Corruption Action Plan that Parliament approved in July 2014, but many of its provisions have not been implemented due to lack of resources. In November 2015, then-President John Mahama fired the CHRAJ Commissioner after she was investigated for misappropriating public funds.
In 1998, the Government of Ghana also established an anti-corruption institution, called the Serious Fraud Office (SFO), to investigate corrupt practices involving both private and public institutions. The SFO’s name became the Economic and Organized Crime Office (EOCO) in 2010, and its functions were expanded to include crimes such as money laundering and other organized crimes. EOCO is empowered to initiate prosecutions and to recover proceeds from criminal activities. The government passed a “Whistle Blower” law in July 2006, intended to encourage Ghanaian citizens to volunteer information on corrupt practices to appropriate government agencies.
Like most other African countries, Ghana is not a signatory to the OECD Convention on Combating Bribery.
The most common commercial fraud scams are procurement offers tied to alleged Ghanaian government or, more frequently, ECOWAS programs. U.S. companies frequently report being contacted by an unknown Ghanaian firm claiming to be an authorized agent of an official government procurement agency. Foreign firms that express an interest in being included in potential procurements are lured into paying a series of fees to have their companies registered or products qualified for sale in Ghana or the West Africa region. U.S. companies receiving offers from West Africa from unknown sources should contact the U.S. Commercial Service in Ghana ( Ghana (trade.gov) ), use extreme caution, and conduct significant due diligence prior to pursuing these offers. American firms can request background checks on companies with whom they wish to do business by purchasing the U.S. Commercial Service’s International Company Profile (ICP).
Office of the Special Prosecutor
6 Haile Selassie Avenue
South Ridge, Accra, Ghana GA-079-096
Telephone: 233 (302) 668 517; 233 (302) 668 506
Commission on Human Rights and Administrative Justice (CHRAJ)
Old Parliament House, High Street, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0) 242 211 53 firstname.lastname@example.org
The Executive Director
Economic and Organized Crime Office (EOCO)
Behind Old Parliament House, High Street, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0) 302 665559, +233 (0) 302 634 363
An Advocacy and Legal Advice Centre (ALAC) Ghana – Transparency International
Abelenkpe Rd Accra, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0)302 760 884
Ghana offers a relatively stable and predictable political environment for American investors when compared to the broader region and has a solid democratic tradition. In December 2020, Ghana completed its eighth consecutive peaceful presidential and parliamentary elections and transfer of power since 1992, with power transferred between the two main political parties three times during that period. On December 7, 2020 New Patriotic Party (NPP) candidate (and incumbent) Nana Akufo-Addo was re-elected over the National Democratic Congress (NDC) candidate, former President John Mahama. The NDC disputed the 2020 presidential election result. The Supreme Court heard the case and ruled that Akufo-Addo had, indeed, won the election. There were isolated cases of violence during the election but no widespread civil disturbances. The next general elections are scheduled for December 7, 2024.
Ghana has a large pool of unskilled labor. English is widely spoken, especially in urban areas. However, according to the Ghana Statistical Service, nationwide illiteracy remains high at 30 percent in 2021. While the unemployment rate was 13.4 percent in 2021, 32.8 percent of Ghanaians aged 15 to 24 were unemployed. About 77 percent of Ghana’s employed population are in the informal sector and contributed about a quarter of its GDP in 2020. Labor regulations and policies are generally favorable to business. Although labor-management relationships are generally positive, occasional labor disagreements stem from wage policies in Ghana’s inflationary environment. Many employers find it advantageous to maintain open lines of communication on wage calculations and incentive packages. A revised Labor Act of 2003 (Act 651) unified and modified the old labor laws to bring them into conformity with the core principles of the International Labor Convention, to which Ghana is a signatory.
Under the Labor Act, the Chief Labor Officer both registers trade unions and approves applications by unions for a collective bargaining certificate. A collective bargaining certificate entitles the union to negotiate on behalf of a class of workers. The Labor Act also created a National Labor Commission to resolve labor and industrial disputes, and a National Tripartite Committee to set the national daily minimum wage and provide policy guidance on employment and labor market issues. The National Tripartite Committee includes representatives from government, employers’ organizations, and organized labor. The Labor Act sets the maximum hours of work at eight hours per day or 40 hours per week but makes provision for overtime and rest periods. Some categories of workers, including trades workers and domestic workers, are excluded from the eight hours per day or 40 hours per week maximum.
The Labor Act prohibits the “unfair termination” of workers for specific reasons outlined in the law, including participation in union activities; pregnancy; or based on a protected class, such as gender, race, color, ethnicity, origin, religion, creed, social, political or economic status, or disability. The Labor Act also provides procedures companies are required to follow when laying off staff, including under certain situations providing severance pay, known locally as “redundancy pay.” Disputes over redundancy pay can be referred to the National Labor Commission. The Act’s provisions regarding fair and unfair termination of employment do not apply to some classes of contract, probationary, and casual workers.
There is no legal requirement for labor participation in management. However, many businesses utilize joint consultative committees in which management and employees meet to discuss issues affecting business productivity and labor issues.
There are no statutory requirements for profit sharing, but fringe benefits in the form of year-end bonuses and retirement benefits are generally included in collective bargaining agreements. Child labor remains a problem. Child labor is particularly severe in agriculture, including in cocoa and fishing. In general, worker protection provisions in the Labor Act, including health and safety provisions, are weakly enforced. Post recommends consulting a local attorney for detailed advice regarding labor issues. The U.S. Embassy in Accra maintains a list of local attorneys, which is available through the U.S. Foreign Commercial Service (https://www.trade.gov/ghana) or U.S. Citizen Services ( https://gh.usembassy.gov/u-s-citizen-services/attorneys/).
Ghana signed an agreement with the Overseas Private Investment Cooperation (OPIC), the predecessor agency to the U.S. International Development Finance Corporation (DFC). DFC is active in Ghana, providing financing and insurance for a number of projects – particularly in the energy, housing, agriculture, and health sectors. All OPIC activities have been assumed by the DFC. The Multilateral Investment Guarantee Agency (MIGA), African Project Development Facility (APDF), African Trade Insurance Agency, and the African investment program of the International Finance Corporation are other sources of information.
|Host Country Statistical source*||USG or international statistical source||USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other|
|Host Country Gross Domestic Product (GDP) ($M USD)||2020||$68,519||2020||$68,532||www.worldbank.org/en/country|
|Foreign Direct Investment||Host Country Statistical source*||USG or international statistical source||USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other|
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||2020||$429||BEA data available at https://apps.bea.gov/international/factsheet/|
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||2020||$2||BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data|
|Total inbound stock of FDI as % host GDP||N/A||N/A||2020||61%||UNCTAD data available at
* Source for Host Country Data: Ghana Statistical Service
|Direct Investment from/in Counterpart Economy Data (2019)|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment||Outward Direct Investment|
|Total Inward||13,594||100%||Total Outward||N/A||N/A|
|British Virgin Islands||1,288||9%||N/A||N/A||N/A|
|“0” reflects amounts rounded to +/- USD 500,000.|
U.S. Embassy, Economic Section
No. 24 Fourth Circular Road, Cantonments, Accra, Ghana
Tel: +233 (0) 302 741 000 (Omit the (0) after the area code when dialing from abroad)