Ghana: Investing in Ghana
According to UNCTAD's World Investment Report 2022, FDI inflows to Ghana increased from USD 1.88 billion in 2020 to USD 2.61 billion in 2021, thanks to projects in extractive industries. The FDI stock reached USD 41 billion in 2021. According to UNCTAD’s Investment Trends Monitor, global FDI momentum weakened in 2022 in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures. Ghana’s top investing economies are South Africa, the Netherlands, France, Mauritius and China (IMF, FDI position). In 2021, the main investors were Singapore, Australia, India and China (GIPC, FDI flows). FDI flows were mainly directed towards the services, oil and gas, manufacturing, trade, construction and agriculture sectors (GIPC, FDI flows). Ghana hosts annual summits (Ghana Investment Summit) to position itself as a hub in West Africa for foreign investors. The COVID-19 Alleviation and Revitalization of Enterprises Support (CARES) initiative, a USD 16 billion programme over 2020-2024, is intended to attract investment in the agribusiness, fertilisers, automotive assembly, aluminium and steel sectors, through exemptions from charges, specific loans and public-private partnerships (Coface).
The authorities in Ghana have been pursuing efforts to simplify the complex and lengthy procedures while also offering tax incentives. Additionally, Ghana is one of the most democratic countries in Africa, and it counts a large and inexpensive labour force, a substantial agricultural base, numerous natural resources and stable institutions. It is also one of the most open economies to foreign equity ownership in the region. However, the burdensome bureaucracy, corruption, weak productivity, costly and difficulty to obtain financing services, under-developed transport infrastructure, ambiguous property laws, frequent power and water cuts and an unskilled labour force are the main factors that hinder FDI. Major ongoing reforms include dematerialising tax, legal and business registration processes. Also, issuing construction permits, operating permits and identification numbers is being automated and digitalised. In addition to these reforms, a scheme to boost the performances of the power sector was initiated. In January 2022, Ghana was removed from the EU grey list of high-risk money laundering countries.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 2,827 | 1,876 | 2,614 |
FDI Stock (million USD) | 38,953 | 40,829 | 41,021 |
Number of Greenfield Investments* | 45 | 34 | 29 |
Value of Greenfield Investments (million USD) | 4,848 | 1,342 | 1,302 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Ghana | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 7.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Strong points of investing in Ghana include:
Challenges for investors in Ghana include:
A reduced corporate tax rate of 8% is available for companies engaged in “non-traditional exports,” and a 20% rate applies to financial institutions on income from loans granted to farming enterprises and leasing companies.
Free Trade Zone (FTZ) companies have a 10-year exemption period after which they pay corporate tax at 15% on export sales.
A rebate is granted to manufacturing companies located outside Accra and Tema. In regional capitals (other than Accra and Tema), the rebate is 75% of the standard corporate tax rate of 25%, and in all other places, it is 50% of the standard tax rate.
Tax holidays are granted, from the beginning of the operations, in the following cases:
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Latest Update: May 2023