1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The Government of Ghana has no overall economic or industrial strategy that discriminates against foreign-owned businesses. The government has made increasing FDI a priority and acknowledged the importance of having an enabling environment for the private sector to thrive. Officials are implementing some regulatory and other reforms to improve the ease of doing business and make investing in Ghana more attractive.
The 2013 GIPC Act requires the Ghana Investment Promotion Center (GIPC) to register, monitor and keep records of all business enterprises in Ghana. Sector-specific laws further regulate investments in minerals and mining, oil and gas, industries within Free Zones, banking, non-banking financial institutions, insurance, fishing, securities, telecommunications, energy, and real estate. Some sector-specific laws, such as in the oil and gas sector and the power sector, include specific local content requirements that could discourage international investment. Foreign investors are required to satisfy the provisions of the GIPC Act as well as the provisions of sector-specific laws. GIPC leadership has pledged to work in closer collaboration with the private sector to address investor concerns but there have been no significant changes to the laws. More information on investing in Ghana can be obtained from GIPC’s website, .
Limits on Foreign Control and Right to Private Ownership and Establishment
Ghana is one of the more open economies to foreign equity ownership in Sub-Saharan Africa. Most of its major sectors are fully open to foreign capital participation.
U.S. investors in Ghana are treated the same as any other foreign investor. All foreign investment projects must register with the GIPC. Foreign investments are subject to the following minimum capital requirements: USD 200,000 for joint ventures with a Ghanaian partner that should have at least 10 percent of the equity; USD 500,000 for enterprises wholly-owned by a non-Ghanaian; and USD 1 million for trading companies (firms that buy or sell imported goods or services) wholly owned by non-Ghanaian entities. The minimum capital requirement may be in cash or capital goods relevant to the investment. Trading companies are also required to employ at least 20 skilled Ghanaian nationals.
Ghana’s investment code excludes foreign investors from participating in eight economic sectors: petty trading, the operation of taxi and car rental services with fleets of fewer than 25 vehicles, lotteries (excluding soccer pools), the operation of beauty salons and barber shops, printing of recharge scratch cards for subscribers to telecommunications services, production of exercise books and stationery, retail of finished pharmaceutical products, and the production, supply, and retail of drinking water in sealed pouches. Sectors where foreign investors are allowed limited market access include: telecommunications, banking, fishing, mining, petroleum, and real estate.
The 1992 Constitution recognized existing private and traditional titles to land. Freehold acquisition of land is no longer permitted. There is an exception, however, for transfer of freehold title between family members for land held under the traditional system. Foreigners are allowed to enter into long-term leases of up to 50 years and the lease may be bought, sold, or renewed for consecutive terms. Nationals are allowed to enter into 99-year leases.
Oil and Gas
The oil and gas sector is subject to a variety of state ownership and local content requirements. The Petroleum (Exploration and Production) Act (2016, Act 919) mandates local participation. All entities seeking petroleum exploration licenses in Ghana must create a consortium in which the state-owned Ghana National Petroleum Corporation (GNPC) holds a minimum 15 percent carried interest. The Petroleum Commission issues all licenses, but exploration licenses must be approved by Parliament. Further, local content regulations specify in-country sourcing requirements with respect to the full range of goods, services, hiring, and training associated with petroleum operations. The regulations also require mandatory local equity participation for all suppliers and contractors. The Minister of Energy must approve all contracts, sub-contracts, and purchase orders above USD 100,000. Non-compliance with these regulations may result in a criminal penalty, including imprisonment for up to five years.
The Petroleum Commission applies registration fees and annual renewal fees on foreign oil and gas service providers, which, depending on a company’s annual revenues, range from USD 70,000 to USD 150,000, compared to fees of between USD 5,000 and USD 30,000 for local companies.
Per the Minerals and Mining Act, 2006 (Act 703), foreign investors are restricted from obtaining a small-scale mining license for mining operations less than or equal to an area of 25 acres (10 hectares). Non-Ghanaians may only apply for industrial mineral rights if the proposed investment is USD 10 million or above. The Act mandates compulsory local participation, whereby the government acquires 10 percent equity in ventures at no cost. In order to qualify for a license, a non-Ghanaian company must be registered in Ghana, either as a branch office or a subsidiary that is incorporated under the Ghana Companies Act or Incorporated Private Partnership Act.
The Minerals and Mining Act provides for a stability agreement, which protects the holder of a mining lease for a period of 15 years from future changes in law that may impose a financial burden on the license holder. When an investment exceeds USD 500 million, lease holders can negotiate a development agreement that contains elements of a stability agreement and more favorable fiscal terms. Parliament passed a new Minerals and Mining (Amendment) Act (Act 900) in December 2015. One significant provision of the new act requires the mining lease-holder to, “…pay royalty to the Republic at the rate and in the manner that may be prescribed.” The previous Act 703 capped the royalty rate at six percent. The Minerals Commission implements the law.
In December 2017, Ghana introduced regulations requiring local content and local participation in the power sector. The Energy Commission (Local Content and Local Participation) (Electricity Supply Industry) Regulations, 2017 (L.I. 2354) specify minimum initial levels of local participation/ownership and ten year targets:
|Electricity Supply Activity||Initial Level of Local Participation||Target Level in 10 Years|
|Wholesale Power Supply||15||51|
|Renewable Energy Sector||15||51|
|Electricity Sales Service||80||100|
|Electricity Brokerage Service||80||100|
The regulations also specify minimum and target levels of local content in engineering and procurement, construction works, post construction works, services, management, operations and staff. All persons engaged in or planning to engage in the supply of electricity are required to register with the ‘Electricity Supply Local Content and Local Participation Committee’ and satisfy the minimum local content and participation requirements within five years. Failure to comply with the requirements could result in a fine or imprisonment.
The National Insurance Commission (NIC) imposes nationality requirements with respect to the board and senior management of locally-incorporated insurance and reinsurance companies. At least two board members must be Ghanaians, and either the Chairman of the board or Chief Executive Officer (CEO) must be Ghanaian. In situations where the CEO is not Ghanaian, the NIC requires that the Chief Financial Officer be Ghanaian. Minimum initial capital investment in the insurance sector is 15 million Ghana cedis (approximately USD 3 million).
Per the Electronic Communications Act of 2008, the National Communications Authority (NCA) regulates and manages the nation’s telecommunications and broadcast sectors. For 800 MHz spectrum licenses for mobile telecommunications services, Ghana restricts foreign participation to a joint venture or consortium that includes a minimum of 25 percent Ghanaian ownership. Applicants have two years to meet the requirement, and can list the 25 percent on the Ghana Stock Exchange. The first option to purchase stock is given to Ghanaians, but there are no restrictions on secondary trading.
There are no significant limits on foreign investment or differences in the treatment of foreign and national investors in other sectors of the economy.
Other Investment Policy Reviews
Ghana has not conducted an investment policy review (IPR) through the OECD recently. UNCTAD last conducted an IPR in 2003.
The WTO last conducted a Trade Policy Review (TPR) in May 2014. The TPR concluded that the 2013 amendment to the investment law raised the minimum capital that foreigners must invest to levels above those specified in Ghana’s 1994 GATS horizontal commitments, and excluded new activities from foreign competition. However, it was determined that overall this would have minimum impact on dissuading future foreign investment due to the size of the companies traditionally seeking to do business within the country. An executive summary of the findings can be found at:
Although registering a business is a relatively easy procedure and can be done online through the Registrar General’s Department (RGD) at , businesses have noted that the process involved in establishing a business is lengthy and complex, and requires compliance with regulations and procedures of at least four other government agencies, including GIPC, Ghana Revenue Authority (GRA), Ghana Immigration Service, and the Social Security and National Insurance Trust (SSNIT).
According to the World Bank’s Doing Business Report, it takes eight procedures and 14 days to establish a foreign-owned limited liability company (LLC) that wants to engage in international trade in Ghana. This is longer than the regional average for Sub-Saharan Africa. Foreign investors must obtain a certificate of capital importation, which can take 14 days. The local authorized bank must confirm the import of capital with the Bank of Ghana, which will then confirm the transaction to GIPC for investment registration purposes.
Per the GIPC Act, all foreign companies are required to register with GIPC after incorporation with the RGD. Registration can be completed online at . While the registration process is designed to be completed within five business days, bureaucracy often delays this process.
The Ghanaian business environment is unique and guidance can be extremely helpful. In some cases, a foreign investment may enjoy certain tax benefits under the law or additional incentives if the project is deemed critical to the country’s development. Most companies or individuals considering investing in Ghana or trading with Ghanaian counterparts find it useful to consult with a local attorney or business facilitation company. The Embassy maintains a list of local attorneys which is available through the U.S. Commercial Service in Ghana (www.export.gov/ghana). Specific information about setting up a business is available at the GIPC website: .
Ghana Investment Promotion Centre
Post: P. O. Box M193, Accra-Ghana
Telephone: +233 (0) 302 665125, +233 (0)302 665126, +233 (0) 302 665127, +233 (0) 302 665128/ +233 (0) 302 665129
Telephone: +233 (0) 302 244318254/ 244318252
Note that mining or oil/gas sector companies are required to obtain licensing/approval from the following relevant bodies:
Ghana has no specific outward investment policy. It has entered into bilateral treaties, however, with a number of countries to promote and protect foreign investment on a reciprocal basis. A few Ghanaian companies have established operations in other West African countries.
2. Bilateral Investment Agreements and Taxation Treaties
Ghana has signed and ratified Bilateral Investment Treaties (BITs) with the following countries: China; Denmark; Germany; Malaysia; the Netherlands; Switzerland; and the United Kingdom. Ghana has concluded the BIT negotiation process with 26 countries in total, 19 of which are awaiting Parliament ratification. The countries with concluded BITs that have not yet been internally ratified are: Barbados, Benin, Botswana, Bulgaria, Burkina Faso, Cote d’Ivoire, Cuba, Egypt, France, Guinea, Italy, Mauritania, Mauritius, Romania, Spain, Yugoslavia, Zambia, and Zimbabwe. Agreements with Pakistan, South Korea, North Korea, and Belgium are being discussed.
Ghana has signed and ratified tax treaties, commonly referred to as double taxation agreements, with the following countries: Belgium, Denmark, France, Germany, Italy, South Africa, Switzerland, the Netherlands, Mauritius, and the United Kingdom. Signed double taxation agreements with the Czech Republic, Morocco, Singapore, Qatar, Malta, Seychelles, Barbados, and Ireland are yet to be ratified by Parliament.
Ghana has not yet signed the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA), but it has allowed banks or foreign financial institutions (FFIs) in Ghana to report information directly to the United States Internal Revenue Service.
The United States has signed several investment-related agreements with Ghana: the Trade and Investment Framework Agreement (TIFA), OPIC Investment Incentive Agreement, and the Open Skies Agreement. In 2012, the United States and Ghana initiated exploratory BIT discussions but those stalled.
Ghana has continued to meet eligibility requirements to participate in the benefits afforded by the African Growth and Opportunity Act (AGOA) and also separately qualifies for the apparel benefits under AGOA.
Corruption in Ghana is comparatively less prevalent than in other countries in the region, but remains a serious problem. The government has a relatively strong anti-corruption legal framework in place, but enforcement of existing laws is rare and haphazard. Corruption in government institutions is pervasive. The Government of Ghana has vowed to combat corruption and has taken some steps to promote better transparency and accountability. These include establishing an Office of the Special Prosecutor to investigate and prosecute corruption cases, and passing a Right to Information Act (similar to the U.S. Freedom of Information Act) to increase transparency.
The most common commercial fraud scams are procurement offers tied to alleged Ghanaian government or, more frequently, ECOWAS programs. U.S. companies frequently report being contacted by an unknown Ghanaian firm claiming to be an authorized agent of an official government procurement agency. Foreign firms that express an interest in being included in potential procurements are lured into paying a series of fees to have their companies registered or products qualified for sale in Ghana or the West Africa region. U.S. companies receiving offers from West Africa from unknown sources should use extreme caution and conduct significant due-diligence prior to pursuing these offers. American firms can request background checks on companies with whom they wish to do business by using the United States Commercial Service’s International Company Profile (ICP). Requests for ICPs should be made through the nearest United States Export Assistance Center. For more information about the United States Commercial Service, visit .
Businesses have noted that bribery is most pervasive in the judicial system and across public services. Companies report that bribes are often exchanged in return for favorable judicial decisions. Large corruption cases are prosecuted, but proceedings are lengthy and convictions are slow. A 2015 exposé captured video of judges and other judicial officials extorting bribes from litigants to manipulate the justice system. Thirty-four judges were implicated, and 25 were dismissed following the revelations, though none have been criminally prosecuted.
In 2016, the public procurement law was amended to address the shortcomings identified over a decade of implementation of the original law aimed at harmonizing the many public procurement guidelines used in the country and to bring public procurement into conformity with WTO standards. Notwithstanding the procurement law, companies cannot expect complete transparency in locally funded contracts. There continue to be allegations of corruption in the tender process and the government has in the past set aside international tender awards in the name of national interest. Though the law on public financial management was overhauled in August 2016, with stiffer sanctions and penalties on breaches, its impact on corruption is yet to be recorded. The Companies Act was also amended in 2016 to establish a register to collect and maintain a national database on beneficial owners in Ghana, but the register has yet to be established.
The 1992 Constitution established the Commission for Human Rights and Administrative Justice (CHRAJ). Among other things, the Commission is charged with investigating alleged and suspected corruption and the misappropriation of public funds by officials. The Commission is also authorized to take appropriate steps, including providing reports to the Attorney General and the Auditor-General in response to such investigations. The effectiveness of the Commission, however, is affected by a lack of resources, as it conducts few investigations leading to prosecutions. CHRAJ issued guidelines on conflict of interest to public sector workers in 2006, and issued a new Code of Conduct for Public Officers in Ghana with guidelines on conflicts of interest in 2009. CHRAJ also developed a National Anti-Corruption Action Plan that was approved by the Parliament in July 2014, but many of its provisions have not been implemented due to lack of resources. In November 2015, then-President Mahama fired the CHRAJ Commissioner after she was investigated for misappropriating public funds.
In 1998, the Government of Ghana also established an anti-corruption institution, called the Serious Fraud Office (SFO), to investigate corrupt practices involving both private and public institutions. SFO’s name was changed to Economic and Organized Crime Office (EOCO) in 2010 and its functions were expanded to include crimes such as money laundering and other organized crimes. EOCO is empowered to initiate prosecutions and to recover proceeds from criminal activities. The government passed a “Whistle Blower” law in July 2006, intended to encourage Ghanaian citizens to volunteer information on corrupt practices to appropriate government agencies.
Like most other African countries, Ghana is not a signatory to the OECD Convention on Combating Bribery.
Resources to Report Corruption
Commission on Human Rights and Administrative Justice (CHRAJ)
Old Parliament House, High Street, Accra
Postal Address: Box AC 489, Accra
Phone: 0302- 662150/ 664267/ 664561/ 668839
Fax: 0302- 660020/ 668840/ 680396/ 673677
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Table 3: Sources and Destination of FDI
|Direct Investment from/in Counterpart Economy Data|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment||Outward Direct Investment|
|Total Inward||Amount||100%||Total Outward||Amount||100%|
|Cayman Islands||Amount||12%||Country #3||Amount||X%|
|Brit Virgin Islands||Amount||11%||Country #4||Amount||X%|
|“0” reflects amounts rounded to +/- USD 500,000.|
Table 4: Sources of Portfolio Investment
Data not available.