Industry in Ghana

Committed to Industrial Development

Ghana’s industrial sector has recently emerged as a significant driver for economic growth in the country. When President Nana Akufo-Addo was sworn into office in 2017, he made industrialisation a major priority, reflected in such programmes as the Ghana Beyond Aid. It aims to improve the competitiveness of trade and investment internationally, while mobilising local resources via industrialisation and value adding.

The Ghanaian economy is poised to grow significantly over the next few years (COVID-19 notwithstanding), thanks to governmental policies that help enable manufacturing and exports. As a result, Ghana has a large and very active consumer and industrial products and services sector, which is dominated by subsidiaries of international companies such as Unilever and Toyota.

However, Ghana also has a thriving SME culture – 90 percent of registered businesses in Ghana are SMEs, and they account for around 85 percent of employment in Ghana’s manufacturing sector.

Sector challenges

However, SMEs in Ghana do face some challenges. Many of them struggle with accessing credit or capital, with financial institutions declining loan requests due to SME’s positioning. Other SMEs struggle with finding a platform to sell their services – leveraging ecommerce is vital for them, especially in the wake of COVID-19.

Businesses both small and large also find that a significant impediment to business is the high cost and unreliability of electricity in Ghana; frequent outages lead to a loss of productivity and increase cost of maintaining machinery. Some businesses can mitigate this through setting up their own microgrids (often using PV systems).

Why do business in Ghana?

Overall, however, Ghana is considered an attractive place to do business. In 2019, the World Bank ranked it at the 114th best for ease of doing business, making it the highest-ranking West African nation on the list.

One reason for this is that the multi-party government is stable and committed to improving business confidence by helping provide a sound macroeconomic climate and streamlining regulations. FDI is being encouraged through 100 percent foreign ownership being permitted.

The country also offers export-free zones, a rapidly expanding stock market and increasing infrastructure development.