A recent study by the Institute for Liberty and Policy Innovation (ILAPI) reveals that Micro, Small, and Medium Enterprises (MSMEs), spend a staggering 30-40% percent of their annual revenue on regulatory compliance, including registration, licensing, and permits.
This attests to the claim that Ghana’s bureaucracy is stifling the growth of small businesses and pushing them towards poverty.
As the ILAPI puts it, the cost of bureaucracy ranges from business registration to licences and permits. It estimated that: average cost to register a business is GH₵1,030; average cost to secure a permit: GH₵1,275; average cost to acquire licenses is up to GH₵10,100.
It further put it that, 84% of MSMEs use middlemen (“goro boys”) due to slow and opaque processes; and 40.8% of MSMEs wait over a month for registration certificates.
These are not just numbers but have impact on job creation and the economy as each MSME loses the ability to employ at least three people due to regulatory costs resulting in potential loss of 3 million jobs annually.
According to statistics, MSMEs account for 92% of businesses and 70% of Ghana’s GDP with the informal sector contributing 70% to GDP and employing 86.4% of the population.
“The regulatory burden is so heavy that many businesses prefer to stay invisible,” the report said. “This undermines revenue mobilization, weakens investor confidence and creates barriers for accessing credit and government support,” the study stated.
Also, according to the 2025 United Kingdom Chamber of Commerce Business Environment and Competitiveness Survey, perceptions of government bureaucracy have fallen sharply, compared to prior years.
Causes of Bureaucratic Inefficiencies
It has been overemphasized that the overlapping laws and agencies compound the bureaucratic system and business regulations. Manufacturing firms, for example, deal with 13 separate laws and agencies, while tourism and ICT businesses navigate long lists of sector-specific approvals. Agencies such as the EPA, FDA, GSA, ORC, GNFS, LUSPA, MMDAs, GTA, and the Public Health Authority often have overlapping mandates, leading to duplicative inspections, conflicting instructions and repeated payment demands.
Also, duplicative inspections and conflicting instructions; and lack of transparency and accountability add up to the challenge.
Reform Recommendations
Business analysts and promoters have recommended a unified digital registration platform; decentralized registration services via MMDAs; harmonization of overlapping regulations; mandatory Regulatory Impact Assessment (RIA); sector-specific one-stop shops; and full digitization of post-registration compliance.
It is believed that implementing these reforms could reduce compliance costs by 30-40%, unlock job creation, and boost government revenue. Ghana’s economic future depends on fixing its bureaucratic system.
By Adnan Adams Mohammed
