As part of his commitment to delivering insightful policy directions to reimagine Ghana’s socioeconomic development, CDD-Ghana Fellow, Dr. Hene Aku Kwapong, has indicated that a thriving private sector does not appear because a government announces it, launches a policy, or cuts a ribbon.
Dr. Hene Aku Kwapong says the private sector, which is believed to be the engine of economic growth, grows quietly and steadily only when institutions actually work.
In his article titled “Re-imagining Ghana from the Bottom-Up,” cited by The High Street Journal, Dr. Kwapong makes a case that institutions are not buildings, offices, or impressive titles.
He explains that they are the everyday systems that make life predictable for citizens and businesses. For instance, he cited a court that settles disputes on time, a regulator that enforces rules fairly, or a public agency that knows its job and does not overstep its powers.
“Once social organization is stable, institutions can actually work. Institutions are not buildings or titles. They are predictable processes that interact with centers of authority that are independent and supportive of a dynamic private sector. Courts that resolve disputes in time. Regulators that enforce standards consistently. Agencies that know their mandate and stay within it,” he explained.
When these systems function well, he says, businesses can plan, invest, and grow with confidence. When they do not, uncertainty takes over.
Dr. Kwapong argues that Ghana’s challenge is not the absence of institutions, but the way they operate. Too often, the country copies the outward look of institutional laws, boards, and procedures without fixing the incentives underneath.
The rules, he says, exist on paper, but in real life, personal discretion and connections matter more. He describes this as “institutional theatre”: everything looks formal, yet nothing works as it should.
“In Ghana, we often copy the outward form of institutions without fixing the underlying incentives. The result is institutional theater. Rules exist on paper, discretion dominates in practice. Under those conditions, institutions cannot support a dynamic private sector. They either suffocate it or push it into informality,” he bemoaned.
In a country where court cases drag on for years and regulations change without warning, he says compliance feels pointless because outcomes depend more on who you know than what you do right.
Under such conditions, businesses either struggle to survive or move into the informal space, away from the reach of the state. The result is a private sector that is suffocated instead of supported.
For this, he says, a dynamic private sector cannot be forced into existence by speeches or policy documents. It emerges naturally when institutions reduce uncertainty and reward those who follow the rules, not those closest to power.
“A functioning private sector is not something you announce into existence. It emerges when institutions reduce uncertainty and reward compliance rather than proximity to power,” he insisted.
He therefore calls for an environment where fairness is predictable, when contracts are respected, and regulators are consistent.
For him, fixing institutions and fixing how decisions are made and enforced are what determine whether the private sector truly grows or remains trapped in survival mode.
