Political Information

Source: Economic Intelligence Unit

Political and Economic Stability

Ghana is considered to be one of the most stable, peaceful and democratic countries in Africa. The country has undergone six free and fair elections and three changes of government over the last 20 years and seen steady improvements in governance and public institutions. In the most recent elections, incumbent President John Mahama won a parliamentary majority with 50.7% of the vote. The country has made a giant stride towards democratic consolidation. Its judiciary has proved to be independent and has generally gained the trust of Ghanaians. The Ghanaian Parliament is vibrant as it has created the avenue for debate and vigorous legislative activity. According to the World Bank, Ghana is ranking among the top three in Africa for freedom of the press and freedom of speech. Nonetheless, Ghana’s economic course over the past couple of years raises many concerns.

Ghana’s economic growth slowed for the fourth consecutive year to an estimated 3.4% in 2015 from 4% in 2014 as energy rationing, high inflation, and ongoing fiscal consolidation weighed on economic activity. Other economic challenges include rising public debt and high inflation rate at 18.5% (absolute) in February 2016 compared to 17.7% in February 2015. Again, Ghana’s overdependence on its three primary commodity exports of gold, cocoa and oil make the country vulnerable to external shocks. However, the country’s stable political environment, fiscal consolidation program and a well-defined Trade Policy has put its back on track. Ghana’s current account deficit narrowed to 7.8 % of GDP in 2015 from 9.6% of GDP in 2014.  Real gross domestic product (GDP) growth is projected to rebound to 5.2% in 2016 from 3.4% in 2015 reflecting the positive impact of a more stable energy supply and increased contribution from the oil and gas and agriculture industries. Energy supply is expected to improve following the emergency measures including the use of power barges. The country’s medium-term growth prospect is strong with 8.2% in 2017 and moderating to 7.5% in 2018 under the assumption that fiscal adjustment remains on track with the support of the International Monetary Fund (IMF) and other development partners. Diversification away from its dependence on commodities, towards value addition on higher-level products through manufacturing and agro-food processing is also contributing to the growth. Ghana is working towards the country’s long-term strategic vision of achieving middle income status by 2020.

As the first African country to receive development aid from Canada, Ghana and Canada enjoy strong relations based on more than five decades of diplomatic cooperation. The 2013 Global Market Action Plan (GMAP) designated Ghana as “an emerging market offering specific opportunities for Canadian companies.” In 2013 alone, Ghana received visits from Canada’s Governor General, Minister of Foreign Affairs, Trade and Development, and Minister of International Trade. In addition to partnering on a number of development and peacebuilding initiatives, Ghana and Canada have seen rapidly growing commercial relations, with bilateral trade increasing by 145.6% between 2000 and 2014.

Business Climate

The World Bank’s annual Doing Business report ranks economies from 1 to 189 (with 1 being the best) on their ease of doing business. In the 2016 report, Ghana ranked 114 overall and 171 for Trading Across Borders, which measures the ease with which a standardized shipment of goods can be imported or exported across its borders. The average time to ship goods out of Ghana is the same as the regional average of 108 days, with an average estimated cost of $USD 725 per 20-foot container. To complete the export process, nine forms of documentation are required: Bill of lading, Cargo release order, Commercial invoice, Export Declaration, Export License, Non-traditional export form, Packing list, Quality Control Certificate, and Terminal handling receipt.

Although there are many reputable exporters in Ghana, Canadian importers should be aware that corruption could be an issue when doing business in the country. Ghana ranked 56th out of 168 countries in Transparency International’s 2015 Corruption Perceptions Index where 1st place indicates least corrupt.  Canadian companies are advised to exercise strict due diligence before working with a company from Ghana to ensure that it is a bona fide and reputable entity. It is suggested that Canadian importers commission a report by a credit information provider to verify the financial strength of the partner.