Business establishments have nearly tripled over the past decade, but the rapid growth has not translated into stronger survival rates, with most firms remaining micro-sized and many closing within their first three years.
The Ghana Digital Economy Outlook 2026, commissioned by the Ministry of Communication, Digital Technology and Innovations and the German development agency GIZ, identifies the proposed Ghana Innovation and Startup Bill, 2025 as a measure that could address these challenges through tax incentives, dedicated funding and formal recognition for eligible startups.
Figures from the Ghana Statistical Service cited in the report show that the number of business establishments increased from 638,235 in 2014 to 1,867,695 in 2024. Micro-sized businesses account for 90.4 percent of the total, while an estimated 70 percent of these small ventures fail within their first three years, largely due to structural challenges.
Ghana has 243 active startups, accounting for 12 percent of the West African market, according to StartupBlink data cited in the report. Despite this presence, the report highlights persistent challenges in building viable businesses and sustaining growth beyond the early stages.
The report identifies several obstacles, including limited access to international payment systems, regulatory uncertainty, and weak institutional oversight. Entrepreneurs working with overseas clients, including translators and other remote service providers, often struggle to receive payments from abroad, restricting their ability to compete in international markets.
Uncertainty over the implementation of existing regulations also weighs on business confidence. The report notes that “Policies exist, but without consistent enforcement, businesses face constant uncertainty.” Weak oversight, it adds, undermines investor confidence and makes it harder for startups to attract the capital needed to expand.
Market and cultural barriers also make it difficult for startups to gain traction. Local partners often prioritise immediate costs over long-term value, limiting the willingness of businesses and institutions to adopt new solutions. This is particularly challenging for startups in sectors such as healthcare and education, where securing early customers is critical to establishing a market.
Weak service delivery by some public utilities also affects confidence in digital solutions. In some cases, digital payment applications are not properly linked to utility meters, leaving gaps between payments and actual service delivery and eroding consumer trust.
Against these challenges, the Ghana Innovation and Startup Bill, 2025, is presented as a framework for improving the conditions in which startups operate.
“The Ghana Innovation and Startup Bill, 2025, provides a roadmap to fix these issues,” the report states.
Under the proposed legislation, a National Innovation and Startup Agency would be established to oversee the sector, alongside a startup labelling system to identify and formally recognise qualifying businesses.
The report explains that “By creating a dedicated agency and a ‘startup labelling’ system, the Bill offers tax breaks and specialized funding for verified businesses.”
Enterprises that meet the requirements would become eligible for tax incentives and specialised funding, while the agency would coordinate support among government institutions, educational institutions and private-sector organisations.
The proposed framework also includes provisions to widen participation in the startup ecosystem. The report says it “reserves spots in incubators for women and rural founders, ensuring that digital growth spreads beyond Accra.” This would help extend access to business support beyond established innovation centres in the capital.
The bill would build on existing interventions such as the YouStart programme, which provides early-stage financing to businesses. However, its proposed tax incentives, dedicated institutional structure and formal startup recognition system would add new forms of support for qualifying enterprises.
The startup bill is one of 15 pieces of legislation being prepared as part of the government’s wider digital policy agenda. Others include the Emerging Technologies Bill, the Data Protection Bill and the Digital Economy and Innovation Development Fund Bill. Together, the proposed laws are intended to strengthen Ghana’s digital policy framework and align it with international standards, including commitments under the United Nations Global Digital Compact.
However, the proposed incentives will only make a difference if startups can access them and the institutions responsible for delivering them function effectively. The report’s concerns about inconsistent enforcement of existing policies highlight the need for a well-resourced agency with the capacity to coordinate support, ensure transparency, and provide sustained assistance to eligible businesses.
Without effective implementation, the legislation risks adding to Ghana’s list of well-intentioned policies that have yet to translate into meaningful improvements for businesses.
