The President of the Ghana-South Africa Business Chamber (GSABC), Mr. Grant Webber, has described Ghana as a “very high-risk” investment destination, citing economic instability, high inflation, and a lack of investor protection as key deterrents.
Speaking on the topic ‘Building Bridges: Navigating Ghana’s Business Culture’ during a ‘Doing Business in Ghana’ webinar organized by South Africa’s Department of Trade, Industry and Competition, Mr. Webber noted that foreign direct investment (FDI) into Ghana has hit a 16-year low, signaling declining investor confidence.
A Bearish Investment Climate
Mr. Webber pointed out that Ghana’s investment climate is not just a matter of perception but reflects real economic challenges. He explained that investors see Ghana as “overpriced, high risk, or uninvestable under current circumstances.”
He noted that both local and international economic analysts have raised similar concerns, warning investors of the country’s economic volatility. However, he acknowledged that companies such as MTN, Goldfields, and AngloGold Ashanti continue to thrive in Ghana, leveraging strong market positions and high global commodity prices.
Banking Sector Under Pressure
Mr. Webber highlighted the resilience of Ghana’s banking sector despite facing severe financial strain. He noted that South African banks operating in Ghana—such as Standard Bank, ABSA, and First National Bank—have maintained strong positions despite the impact of the recent domestic debt exchange program (DDEP), which led to major financial losses. However, he expressed concern over Ghana’s soaring non-performing loans (NPLs), which have hit 25%, making lending more difficult.
Describing Ghana’s current interest rate environment as “almost impossible” for businesses relying on debt financing, he pointed out that commercial loans attract rates as high as 36% to 37%, making credit unaffordable for enterprises needing working capital or trade financing.
Inflation and Institutional Uncertainty
Inflation remains a major concern, fluctuating between 25% and 55% over the past year. “Anything that requires high input costs and dollar-denominated payments suffers under these tough macroeconomic conditions,” Mr. Webber warned. In contrast, South Africa’s inflation rate hovers around 7% to 8%, underscoring Ghana’s severe economic challenges.
He also criticized Ghana’s institutional framework, stating that while the Ghana Investment Promotion Centre (GIPC) is meant to facilitate foreign investments, its regulatory framework is weak and offers little protection to investors. While he acknowledged ongoing reforms to the GIPC Act, he stressed the need for consistent application of investment laws.
AGI’s Perspective: Signs of Improvement
Responding to Mr. Webber’s concerns, Greater Accra Regional Chairman of the Association of Ghana Industries (AGI), Mr. Tsonam Cleanse Akpeloo, reassured investors of brighter prospects under Ghana’s new administration.
“These challenges are not unique to Ghana; every country has its economic hurdles. However, the new government appears committed to stabilizing the economy and addressing long-standing issues,” he noted.
Mr. Akpeloo pointed to the recent budget presented by the Finance Minister, describing it as a “stabilizing budget” that focuses on creating a more predictable business environment. He emphasized that while the cost of doing business remains high due to multiple levies and taxes, AGI is actively advocating for the removal of certain charges to ease the burden on businesses.
He highlighted key developments, such as the scrapping of the emissions levy and the absence of new taxes in the latest budget, as indicators of a government willing to create a more business-friendly climate. Inflation, which previously peaked at 53%, is now on a downward trend, and policy rates have also been reduced to encourage investment.
Optimism for Future Investment
Despite past economic challenges, Mr. Akpeloo stressed that Ghana remains ripe with investment opportunities. He pointed to the extractive sector—where new discoveries of copper and diamonds present fresh opportunities—as well as manufacturing, where Ghana still imports about 70% of its needs.
He also underscored the government’s 24-hour economy initiative as a major policy shift aimed at boosting industrial productivity and employment. “The government is determined to make the private sector thrive, and this is the best time for investors to explore Ghana’s potential,” he concluded.
