Weak anti-corruption measures and poor governance are expected to hurt Ghana’s business environment. Issues like money laundering and weak controls on terrorism financing could slow progress and create uncertainty.
On top of that, challenges such as skill gaps, bad infrastructure, and poor transport systems will make it harder for businesses to grow and attract investors.
The Economist Intelligence Unit (EIU) says these issues will continue to be major barriers for investor confidence and business growth in Ghana. Without stronger reforms, the country may find it hard to reach its economic goals.
The EIU’s One-Click Report highlighted Ghana’s ongoing efforts to stabilize its economy and improve the business environment. After making significant progress on debt restructuring, including a Eurobond exchange with a 98% participation rate, attention is expected to shift toward addressing critical issues such as high inflation and large fiscal deficits.
The debt restructuring process, which is predicted to conclude by the end of 2024, will provide much-needed relief and create room for the government to focus on implementing key reforms.
However, Ghana’s recovery is not without challenges. The controversial anti-LGBTQ+ law passed earlier this year has strained relationships with Western allies and international financial partners. While the Supreme Court has yet to rule on the law’s constitutionality, the EIU warns that approval could lead to delays in international financial support, complicating the government’s efforts to stabilize the economy.
In the coming years, the EIU predicts that the next government, likely to be led by the NDC, will maintain a focus on fiscal discipline. This includes gradual increases in electricity tariffs, targeted subsidies for low-income households, and reforms in vital sectors such as energy and cocoa. These measures are expected to play a key role in driving medium-term economic growth.
Beyond fiscal measures, the report also emphasizes the importance of private-sector-driven growth. Projects such as special economic zones and the $12 billion petroleum hub are expected to reduce Ghana’s reliance on imports and strengthen the foundation for long-term economic stability. These initiatives highlight the government’s commitment to boosting domestic production and building a resilient economy.
While these plans are promising, the EIU stresses that business growth in Ghana will hinge on its ability to tackle deep-rooted corruption and strengthen frameworks against money laundering and terrorism financing.
Ghana has faced serious problems with corruption, money laundering, and terrorism financing over the years, and these issues still affect its economy and business environment.
Corruption scandals have popped up often, especially in areas like energy and public projects. For example, the Electricity Company of Ghana (ECG) was found to have broken rules in deals worth over $145 million, according to the Auditor-General. Cases like these have made people lose trust in the system and scared away investors.
Money laundering is another big issue. Ghana has been flagged as a hotspot for illegal money from activities like drug trafficking and illegal mining (galamsey). This has put pressure on the country to clean up its financial systems. Back in 2020,
Ghana was blacklisted by the European Union 2020 for not doing enough to stop money laundering and terrorism financing. Even though the country was taken off the list in 2022 after making some changes, there’s still a lot of work to be done, as highlighted by the EIU.
There’s also the issue of terrorism financing. While it’s not as widespread, it’s becoming a growing concern with extremist activities rising in West Africa. Ghana’s location makes it a possible transit point for illegal money tied to these activities, which has raised red flags.
These challenges are expected to continue weighing heavily on the business environment, creating uncertainty and deterring investment if not addressed.
