By Adnan Adams Mohammed; Finance and Economic Journalist
In the boardrooms of Accra and the bustling markets of Kumasi, a singular conversation dominates: the survival of the Ghanaian enterprise.
In the wake of official macroeconomic indicators pointing toward a burgeoning recovery, the ground-level reality for many businesses remains a grueling tug-of-war between stabilizing data and stifling operational costs.
From the exodus of local manufacturers to the struggle for capital among women entrepreneurs, Ghana’s business environment is at a critical crossroads.
The “exodus” of local production
The Ghana Union of Traders Association (GUTA) has sounded one of the loudest alarms. According to Joseph Paddy, Vice President of GUTA, the high cost of doing business is no longer just a balance sheet issue; it is a threat to national sovereignty in production.
“Ghana remains one of the most expensive operating environments in the sub-region,” Paddy noted during a recent Joy Business Roundtable. The disparity is startling: while production costs in Ghana can consume 30% to 35% of revenue, neighboring Ivory Coast sees figures as low as 3% to 7%.
The result is a worrying trend of “de-industrialization.” Paddy warned, “Traders often find it cheaper to import goods than to source them locally, even after paying duties.” He cited instances of local manufacturers shutting down machines to become importers simply to stay afloat, a move that inevitably leads to job losses.
Structural bottlenecks vs. macro gains
The disconnect between “headline” success and “street” reality is perhaps best explained by Mark Badu-Aboagye, CEO of the Ghana National Chamber of Commerce and Industry (GNCCI). While the government celebrates falling inflation recorded recently at 3.2% Badu-Aboagye argues that structural bottlenecks are blunting these gains.
“The transmission mechanism takes some time, moving from the macro to the micro,” he explained. “Now you’ve done the macro, it is about time you do the micro.”
A major point of contention is the “mismatch” between inflation and interest rates. With inflation at 3.2% but the reference rate hovering around 10%, businesses are still paying a premium for credit. “I see a mismatch in there… I want to see a very closer relationship between the inflation and the lending rate,” Badu-Aboagye stated, emphasizing that high production costs fueled by energy and transport keep prices elevated for consumers despite the central bank’s tight monetary policy.
The capital gap: Women in business
In Kumasi, the conversation shifts to equity and access. At the 3rd Women in Business Dialogue, stakeholders highlighted that while women represent 46% of Ghana’s entrepreneurial workforce, they remain the most underserved by formal financial structures.
Dr. Gordon Acquaye, CEO of Business and Financial Times (B&FT), argued that funding alone isn’t the silver bullet. “Women need to be given that tool and structure from the onset… we are able to help them with bookkeeping, then the next level will be to scale up,” he noted. The upcoming Women’s Development Bank is seen as a beacon of hope, but as Regina Ofori of Ecobank emphasized, formalization remains the key: “Women can do a lot to support their businesses like registering their companies.”
A glimmer of hope: Tax reforms and stability
Despite the hurdles, there are signs of a policy pivot. Mary Kwarteng Darko, an Associate Director at PwC Ghana, suggests the tax regime is shifting from “aggressive” to “business-friendly.” The abolition of the Emissions Levy, E-Levy, and the COVID-19 Health Recovery Levy has provided immediate psychological and financial relief.
“Overall sentiment is that the country is taking a more balanced approach to taxation,” Darko observed. However, she cautioned that the extension of the Growth and Sustainability Levy to 2028 creates “mixed sentiments” for long-term planning.
From the government’s perspective, the recovery is well underway. Frederick Amissah, Technical Advisor to the Finance Minister, maintains that stability is breeding confidence. “Businesses are becoming a lot more confident. This shows the macro stability we have now is working,” he asserted.
The path forward
The consensus among industry players is clear: stability is a prerequisite, but it is not a destination. For the “Ghanaian Dream” of a self-reliant, industrial economy to survive, the government must move beyond managing the currency to managing the cost of a kilowatt of power and the interest on a small business loan.
As Joseph Paddy aptly put it: “Every business grows on policy. One good policy can help a business grow.” The question remains whether those policies will arrive fast enough to keep the lights on in Ghana’s remaining factories.
