VZCZCXRO3292
RR RUEHMA RUEHPA
DE RUEHAR #0089/01 0160913
ZNR UUUUU ZZH
R 160913Z JAN 08
FM AMEMBASSY ACCRA
TO RUEHC/SECSTATE WASHDC 5976
INFO RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/USDOC WASHDC 0642
RUCPCIM/CIMS NTDB WASHDC

UNCLAS SECTION 01 OF 11 ACCRA 000089 
 
SIPDIS 
 
Dept for EB/IFD/OIA for N HATCHER and AKAMBARA 
 
SIPDIS 
 
E.O.12958: N/A 
TAGS: ECON EFIN OPIC USTR
SUBJECT: GHANA 2008 INVESTMENT CLIMATE STATEMENT 
 
REF: STATE 158802 
 
Post is pleased to provide the 2008 Investment Climate 
Statement for Ghana. 
 
Begin Text: 
 
A.1. Openness to Foreign Investment 
 
Attracting foreign direct investment continues to be a 
priority for the government.  President Kufuor, re-elected 
in December 2004, encourages foreign investment as an 
integral part of Ghana's economic policy.  The Ghana 
Investment Advisory Council (GIAC), which was established 
with the help of the World Bank, helps shape government 
policy aimed at creating an enabling investment 
environment.  The GIAC consists of multinational and local 
companies and institutional observers (IMF, WB, UNDP). 
 
Ghana embarked on a privatization program in the early 
1990s.  The Ghanaian government at one point controlled 
more than 350 state-owned enterprises, but nearly 300 were 
privatized by the end of 2000 under the privatization 
program of former President Rawlings.  Privatization 
efforts have continued under the Kufuor Administration 
under a reconstituted Divestiture Implementation Committee. 
As of December 31, 2007, more than 300 firms had been 
privatized, leaving only a handful of state-owned 
enterprises, some of which are in very poor financial 
condition.  The government also pursues privatization 
through selling of state-owned shares on the Ghana Stock 
Exchange (GSE).  For example, the government in 2007 
offered its shares in Ghana Oil Company and State Insurance 
Company on the GSE. 
 
The Divestiture Implementation Committee (www.dic.com.gh) 
is the government institution that oversees the 
privatization of public enterprises.  Actual divestiture is 
usually done through a bidding process, and bids are 
evaluated on the basis of criteria including management 
skills, financial resources, and business plans.  New 
owners are expected to build the enterprises into 
profitable, productive ventures, which contribute to tax 
revenue and increase local employment.  Foreign investors 
comprise most of the interested bidders.  Few local 
investors have sufficient capital to participate in this 
process except as partners with foreign firms. 
 
Although the Kufuor administration has publicly stated its 
support to eliminate or reduce its holdings in state-owned 
enterprises, it has made only three major new divestitures 
during its 7 year tenure, the Cocoa Processing Company, 
Ghana Oil Company and the State Insurance Company. The 
government's partial privatizations of Ghana Telecom and 
Western Wireless (Westel) are in their final stages. 
 
The Government of Ghana recognizes that attracting foreign 
direct investment requires an enabling legal environment, 
and has passed laws that encourage foreign investment and 
replaced some that previously stifled it.  The Ghana 
Investment Promotion Center (GIPC) Act, 1994 (Act 478), 
governs investment in all sectors of the economy except 
minerals and mining, oil and gas, and the free zones. 
Sector-specific laws further regulate banking, non-banking 
financial institutions, insurance, fishing, securities, 
telecommunications, energy, and real estate.  Foreign 
investors are required to satisfy the provisions of the 
investment act as well as the provisions of sector-specific 
laws.  In general, the GIPC has streamlined procedures and 
reduced delays.  More information on investing in Ghana can 
be obtained from GIPC's website, www.gipc.org.gh. 
 
The GIPC law also applies to foreign investment in 
acquisitions, mergers, takeovers and new investments, as 
well as to portfolio investment in stocks, bonds, and other 
securities traded on the Ghana Stock Exchange. 
 
The GIPC law specifies areas of investment reserved for 
Ghanaians, such as small-scale trading, operation of taxi 
services (except when a non-Ghanaian has a fleet of at 
least 10 vehicles), pool betting businesses and lotteries 
(except soccer pools), beauty salons and barber shops.  The 
law further delineates incentives and guarantees that 
relate to taxation, transfer of capital, profits and 
dividends, and guarantees against expropriation. 
 
With the enactment of the GIPC law, the Government of Ghana 
stopped screening investments.  The GIPC registers 
investments and provides assistance to enable investors to 
 
ACCRA 00000089  002 OF 011 
 
 
become established and take advantage of relevant 
incentives.  GIPC registration can be done online at 
http://www.gipc.org.gh/forms_page.aspx.  The Government of 
Ghana has no overall economic or industrial strategy that 
discriminates against foreign-owned businesses.  In some 
cases a foreign investment can enjoy additional incentives 
if the project is deemed critical to the country's 
development.  U.S. and other foreign firms are able to 
participate in government-financed and/or research and 
development programs on a national treatment basis. 
 
The only pre-condition for foreign investment in Ghana is 
financial; the GIPC requires foreign investors to satisfy a 
minimum capital requirement.  Once this is met and all 
necessary documents submitted, investments are supposed to 
be registered within five working days.  However, the 
actual time required for registration can be significantly 
higher (sometimes three to four times) than the required 
time. 
 
Although registration is relatively easy, the entire 
process of establishing a business in Ghana is lengthy, 
complex, and requires compliance with regulations and 
procedures of at least 5 government agencies including the 
GIPC, Registrar General Department, Internal Revenue 
Service (IRS), Ghana Immigration Service, and Social 
Security and National Insurance Trust (SSNIT). 
Nevertheless, the government?s reforms in this area have 
yielded some returns.  According to The World Bank's Doing 
Business 2008 report issued in 2007, the average time to 
start a business in Ghana is 42 days.  This is a 
significant improvement from the 129 days it took in 2003 
but still places Ghana 138th out of 178 countries surveyed 
on this indicator.  In terms of overall ease of doing 
business, the report ranks Ghana 87th and, for the past two 
years, one of the top ten reformers in the world. 
 
The minimum capital required for foreign investors is USD 
10,000 for joint ventures with Ghanaians or USD 50,000 for 
enterprises wholly owned by non-Ghanaians.  Trading 
companies either wholly or partly-owned by non-Ghanaians 
require a minimum foreign equity of USD 300,000 and must 
employ at least ten Ghanaians.  This may be satisfied 
through remitting convertible foreign currency to a bank in 
Ghana or by importing goods into Ghana for the purpose of 
the investment.  The minimum capital requirement is, 
however, not applicable to portfolio investment, 
enterprises set up for export trading (operating inside or 
outside of Free Zones), or branch offices. 
 
The principal law regulating investment in minerals and 
mining is the Minerals and Mining Act, 2006 (Act 703), 
which amended the 1984 and 1994 laws.  It addresses 
different types of mineral rights, issues relating to 
incentives and guarantees, and land ownership.  The 2006 
law contains a stability and development agreement, which 
protects the holder of a mining lease from future changes 
in law for a period of 15 years.  The Minerals Commission 
(www.mincomgh.org) is the government agency that implements 
the law.  Non-Ghanaians may invest in mining, except in 
small-scale (artisanal) mining, which is reserved for 
Ghanaians. 
 
The Petroleum Exploration and Production Law, 1984 (PNDCL 
84), known as the Petroleum Law, regulates oil and gas 
exploration and production in Ghana.  The law deals 
extensively with petroleum contracts, the rights, duties, 
responsibilities of contractors, and compensation payable 
to those affected by activities in the petroleum sector. 
The Ghana National Petroleum Corporation (GNPC) 
(www.gnpcghana.com) is the government institution that 
administers this law.  Several U.S. companies currently are 
involved in oil/gas exploration in Ghana. 
 
There are no major sectors in which American investors are 
denied the same treatment as other foreign investors. 
There are, however, some areas where foreign investors as a 
whole are denied national treatment: banking, securities, 
fishing and real estate.  Regarding real estate, the 1992 
Constitution recognized existing private and traditional 
title to land but does not now allow freehold acquisition 
of land.  There is an exception for transfer of freehold 
title between family members for lands held under the 
traditional system.  Foreigners are allowed to enter into 
long-term leases of up to 50 years (the lease may be bought 
and sold and/or renewed for consecutive terms) while 
Ghanaians are allowed to enter into 99 year leases. 
 
The U.S. Embassy in Accra advises companies or individuals 
 
ACCRA 00000089  003 OF 011 
 
 
considering investing in Ghana or trading with Ghanaian 
counterparts to consult with a local attorney or business 
facilitation company.  The Embassy maintains a list of 
local attorneys which is available on the embassy website 
(www.accra.usembassy.gov) or upon request. 
 
A.2. Conversion and Transfer Policies 
 
Ghana operates a free-floating exchange rate policy regime. 
Investors may convert and transfer funds associated with 
the investment provided there is documentation proving how 
the funds were acquired.  For details, consult the GIPC Act 
and the Foreign Exchange Act.  Ghana's local currency, the 
Ghana cedi, can be exchanged for dollars and major European 
currencies. 
 
In July 2007, the government redenominated the cedi by 
removing 4 zeroes.  As of January 1, 2008, the new 
currency, the Ghana cedi (notes) and Ghana pesewa (coins) 
is the only currency in circulation.  As of January 2008, 
one USD was equal to about .96 Ghana cedi and the largest 
bill is 50 Ghana cedis, worth a little more than USD 50. 
 
Ghana's hard currency needs are met largely through cocoa 
and gold export revenues, official assistance, and private 
remittances.  The fall in the world prices of Ghana?s 
export commodities in 1999 and increases in oil import 
bills led to a foreign currency shortage in 2000 and a 
subsequent, large depreciation of the cedi.  The cedi has 
been quite stable since November 2002, bolstered by sound 
macroeconomic policies, record levels of remittances and 
favorable cocoa and gold prices but depreciated about 4% 
against the dollar over the last two months of 2007. 
However, the Bank of Ghana has noted the very low 
repatriation rate of gold proceeds. 
 
Ghana has no restrictions on the transfer of funds 
associated with investment, provided documentation about 
how the funds were acquired is available.   Ghana's 
investment laws guarantee that investors can transfer the 
following in convertible currency out of Ghana:  dividends 
or net profits attributable to the investment; payments in 
respect of loan servicing where a foreign loan has been 
obtained; fees and charges in respect to technology 
transfer agreements registered under the GIPC law; and the 
remittance of proceeds from the sale or liquidation of the 
enterprise or any interest attributable to the investment. 
 
There is no legal parallel remittance system for investors. 
The Parliament passed a new Foreign Exchange Act in 
November 2006.  The Act provides a new legal framework for 
the management of foreign exchange transactions in Ghana. 
It is expected to efficiently integrate the country?s forex 
market into the global financial system, give legal backing 
to policies of the 1980s that liberalized the foreign 
exchange regime.  It fully liberalized capital account 
transactions, including allowing foreigners to buy 
securities in Ghana.  It also removed the requirement for 
the central bank to approve offshore loans.  Payments or 
transfer of foreign currency can only be made through 
institutions such as banks or persons licensed to do money 
transfer.  The new law also gives the Central Bank power to 
allow foreigners to buy securities in Ghana. 
 
A.3. Expropriation and Compensation 
 
Ghana's investment laws provide guarantees against 
expropriation and nationalization, although the 1992 
Constitution provides some exceptions to these laws.  The 
Constitution sets out both exceptions and a clear procedure 
for the payment of compensation in allowable cases of 
expropriation or nationalization.  The Government of Ghana 
may compulsorily take possession or acquire property only 
where the acquisition is in the interest of national 
defense, public safety, public order, public morality, 
public health, town and country planning or the development 
or utilization of property in a manner to promote public 
benefit.  It must, however, make provision for the prompt 
payment of fair and adequate compensation.  The Government 
of Ghana also allows access to the high court by any person 
who has an interest or right over the property. 
 
American investors are generally not subject to 
differential or discriminatory treatment in Ghana, and 
there have been no official government expropriatory 
actions in recent times.  Since President Kufuor?s 
administration took power in 2001, two U.S. investors have 
filed for international arbitration against the Ghana 
government, claiming expropriation.  While these cases were 
 
ACCRA 00000089  004 OF 011 
 
 
resolved when the Government of Ghana agreed to purchase 
the investments, in both cases, the U.S. investors agreed 
to the terms of the government purchase as an exit strategy 
and considered the terms inequitable. 
 
A.4. Dispute Settlement 
 
Ghana's legal system is based on British common law.  The 
most important exception for the purpose of investment is 
the acquisition of interest in land, which is governed by 
both statutory and customary law. 
 
The judiciary comprises both the lower courts and the 
superior courts.  The superior courts are the Supreme 
Court, the Court of Appeal, and the High Court.  Lawsuits 
are permitted and usually begin in the High Court.  There 
is a history of government intervention in the court 
system, although somewhat less so in commercial matters. 
The courts have, when the circumstances require, entered 
judgment against the government.  However, the courts have 
been slow in disposing of cases and at times face 
challenges in enforcing decisions, largely due to resource 
constraints and institutional inefficiencies.  There is a 
growing interest in alternative dispute resolution, 
especially as it applies to commercial cases.  Several 
lawyers are providing arbitration and/or conciliation 
services.  Arbitration decisions are enforceable provided 
they are registered in the courts. 
 
The government has established "fast-track" courts to 
expedite action on some cases.  The "fast track" courts, 
which are automated (computerized) divisions of the High 
Court of Judicature, were intended to try cases to 
conclusion within six months.  However, they have not been 
able to handle cases that quickly.  In March 2005, the 
government established a commercial court to try commercial 
claims.  The Court also handles disputes involving 
commercial arbitration and other settlement awards, 
intellectual property rights, including patents, copyrights 
and trademarks, commercial fraud, applications under the 
Companies Code, tax matters, and insurance and re-insurance 
cases.  A distinctive feature of the commercial court is 
the use of mediation or other alternative dispute 
resolution mechanisms, which are mandatory in the pre-trial 
settlement conference stage. 
 
Enforcement of foreign judgments in Ghana is based on the 
doctrine of reciprocity.  On this basis, judgments from 
Brazil, France, Israel, Italy, Japan, Lebanon, Senegal, 
Spain, the United Arab Emirates, and the United Kingdom are 
enforceable.  Judgments from the United States are not 
currently enforceable in Ghana. 
 
The GIPC, Free Zones, Labor, and Minerals and Mining Laws 
outline dispute settlement procedures and provide for 
arbitration when disputes cannot be settled by other means. 
They also provide for referral of disputes to arbitration 
in accordance with the rules of procedure of the United 
Nations Commission on International Trade Law (UNCITRAL), 
or within the framework of a bilateral agreement between 
Ghana and the investor's country. 
 
The United States has signed three bilateral trade and 
investment agreements with Ghana: the OPIC Investment 
Incentive Agreement, the Trade and Investment Framework 
Agreement (TIFA), and the Open Skies Agreement.  These 
agreements contain some provision for investment and trade 
dispute settlement.  When the parties do not agree on a 
venue for arbitration, the investor's choice prevails.  In 
this regard, Ghana accepts as binding the international 
arbitration of investment disputes.  Ghana does not have a 
bankruptcy statute.  The Companies Code of 1963, however, 
provides for official closure of a company when it is 
unable to pay its debts. 
 
In 1996, the privately managed Ghana Arbitration Center was 
established to strengthen the legal framework for 
protecting commercial and economic interests, and to 
bolster investors' confidence in Ghana.  The American 
Chamber of Commerce's (Ghana) Commercial Conciliation 
Center provides arbitration services on trade and 
investment issues. 
 
Ghana signed and ratified the Convention on the Settlement 
of Investment Disputes in 1966, which allows for 
arbitration under ICSID ? the International Center for the 
Settlement of Investment Disputes.  However, at least with 
disputes related in the energy sector, the government has 
expressed a strong preference for handling disputes under 
 
ACCRA 00000089  005 OF 011 
 
 
UNCITRAL rules.  Ghana is also a signatory and contracting 
state of the UN Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards (the "New York 
Convention"). 
 
A.5. Performance Requirements and Incentives 
 
Ghana is in compliance with WTO Trade-Related Investment 
Measures (TRIMS) notification. 
 
Generally, Ghana does not have performance requirements for 
establishing, maintaining, and expanding a business. 
However, as a condition of privatization of some state- 
owned enterprises, notably the telecommunications sector, 
acquiring companies have to meet performance targets or 
they may have their licenses revoked.  In the case of 
banks, the opening of branches requires approval from the 
central bank.  Investors are not required to purchase from 
local sources.  Except for free zone enterprises operating 
under the Free Zone Act, which are required to export 70 
percent of their products, investors are not required to 
export a specified percentage of their output. 
 
Foreign investors are not required by law to have local 
partners except in the fishing, insurance, and mining 
industries, as well as in the securities market.  In the 
tuna-fishing industry, non-Ghanaians may own a maximum of 
seventy-five percent of the interest in a tuna-fishing 
vessel.  In the insurance sector, a non-Ghanaian cannot own 
more than sixty percent of an insurance company.  In the 
case of the Ghana Stock Exchange, a single foreign investor 
cannot own more than ten percent of any security listed. 
This applies to individuals as well as institutional 
investors.  The total holding of all foreigners in a listed 
security cannot exceed seventy-four percent.  There is 
compulsory local participation in the minerals and mining 
sector:  by law, the Government of Ghana acquires ten 
percent of all interests in mining ventures at no cost. 
The new 2006 Minerals and Mining law, however, allows the 
government of Ghana to negotiate any other form of 
participation. 
 
There are no requirements on physical location of 
investments.  However, there are tax incentives to 
encourage investment in specific geographic locations, 
primarily in areas outside the main urban centers.   There 
are also no import substitution restrictions.  While the 
only requirement for compulsory employment of Ghanaians is 
that any investment in a trading enterprise must employ a 
minimum of ten Ghanaians, the issuance of visa/work permits 
for expatriate staff is tied to the size of the investment. 
 
There are regulations relating to the transfer of 
technology when it is not freely available in Ghana.  For 
example, according to the Technology Transfer Regulations, 
1992, total management and technical fee levels should not 
exceed 8 percent of net sales.  Higher fees have to be 
approved by GIPC.  Among others, the regulation does not 
allow agreements that impose obligation to procure 
personnel, inputs, and equipment from the transferor or 
specific source.  The duration should not exceed 10 years 
and cannot be renewed for more than 5 years.    Any 
provisions in the agreement inconsistent with Ghanaian 
regulations are unenforceable in Ghana. 
 
Investment incentives differ slightly depending upon the 
law under which an investor operates.  For example, while 
all investors operating under the Free Zone Act are 
entitled to a ten-year corporate tax holiday, investors 
operating under the GIPC law are not automatically entitled 
to a tax holiday, depending upon the sector in which they 
are operating. 
 
All investment-specific laws contain some investment 
incentives. The GIPC law allows for import and tax 
exemptions for plant inputs and machinery (and parts 
thereof) imported for the purpose of the investment. 
Specifically, chapters 82, 84, 85, and 89 of the Customs 
Harmonized Commodity and Tariff Code zero-rates (i.e. does 
not levy import duty) these production items.  The 
Government of Ghana recently imposed a five percent import 
duty on some items that were previously zero-rated, in 
conformity with the ECOWAS common external tariff. 
 
The Ghanaian tax system is replete with tax concessions 
that make the effective tax rate generally low.  The 
minimum incentives are specified in the GIPC law and are 
not applied in an ad hoc or arbitrary manner.  Once the 
investor has been registered under the GIPC law, the 
 
ACCRA 00000089  006 OF 011 
 
 
investor is entitled to the incentives provided by law. 
The government, however, has discretion to grant an 
investor additional customs duty exemptions and tax 
incentives beyond the minimum stated in the law. 
 
The GIPC website (www.gipc.org.gh) provides a more thorough 
description of incentive programs.  The law also guarantees 
the investor all the tax incentives provided for under 
Ghanaian law.  For example, rental income from commercial 
and residential property for the first five years after 
construction is exempt from tax.  Similarly, income from a 
company selling or letting out premises is income tax 
exempt for the first five years of operation.  Rural banks 
and cattle ranching are exempt from income tax for 10 
years. 
 
The government lowered the corporate tax rate to 25 percent 
(from 32.5 percent in 2004 and 28 percent in 2005) in 2006. 
The new rate applies to all sectors except income from non- 
traditional exports (eight percent).  For some sectors 
there are tax holidays for a number of years.  These 
sectors include, free zone enterprises and developers (zero 
percent for the first 10 years and eight percent 
thereafter), real estate development and rental (zero 
percent for the first five years and 25 percent 
thereafter), agro-processing companies (zero percent for 
the first five years after which the tax rate ranges from 0 
to 25 percent depending on the location of the company in 
Ghana), and waste processing companies (zero percent for 
seven years and 25 percent thereafter).  Tax rebates are 
also offered in the form of incentives based on location. 
A capital allowance in the form of accelerated depreciation 
is also applicable in all sectors except banking, finance, 
commerce, insurance, mining, and petroleum. 
 
The government charges a 12.5 percent VAT plus a 2.5 
percent Health Insurance Levy, instituted in August 2004, 
on most imports, all consumer purchases, services, 
accommodation in hotels and guest houses, food in 
restaurants, hotels and snack bars, as well as advertising, 
betting and entertainment. 
 
Ghana has no discriminatory or excessively onerous visa 
requirements.  A foreign investor who invests under the 
GIPC law is automatically entitled to a specific number of 
visas/work permits based on the size of the investment. 
When an investment of USD 10,000 or its equivalent is made 
in convertible currency or machinery and equipment, the 
enterprise can obtain a visa/work permit for one expatriate 
employee.  An investment of USD 10,000 to USD 100,000 
entitles the enterprise to two automatic visas/work 
permits.  An investment of USD 500,000 and above allows an 
enterprise to bring in four expatriate employees.  An 
enterprise may apply for extra visas/work permits, but the 
investor must justify why a foreigner must be employed 
rather than a Ghanaian.  There are no restrictions on the 
issuance of work and residence permits to Free Zone 
investors and employees. 
 
Ghana has no import price controls.  It is pursuing a 
liberalized import regime policy within the framework and 
the spirit of the World Trade Organization to accelerate 
industrial growth.  The Government of Ghana joined other 
ECOWAS countries on the phased implementation of the ECOWAS 
Common External Tariff on January 1, 2005. 
 
A.6. Right to Private Ownership and Establishment 
 
Ghana?s laws recognize the right of foreign and domestic 
private entities to own and operate business enterprises. 
Foreign entities are, however, prohibited by law from 
engaging in certain business activities in Ghana (see 
section 1, paragraph 6). 
 
Private entities may freely acquire and dispose of their 
interests in Ghana.  When a foreign investor disposes of an 
interest in a business enterprise, the investor is entitled 
to repatriate his or her earnings in a freely convertible 
currency. 
 
Private and public enterprises compete on equal basis with 
respect to access to credit, markets, licenses, and 
supplies. 
 
A.7. Protection of Property Rights 
 
The legal system recognizes and enforces secured interest 
in property, both chattel and real, but the process to get 
clear title over land is often difficult, complicated, and 
 
ACCRA 00000089  007 OF 011 
 
 
lengthy.  It is important to conduct a thorough search at 
the Lands Commission to ascertain the identity of the true 
owner of any land being offered for sale.  Investors should 
be aware that land records can be incomplete or non- 
existent and, therefore, clear title may be impossible to 
establish. 
 
Mortgages exist, although there are only a few thousand in 
existence due to a variety of factors including land 
ownership issues and scarcity of long-term finance. 
Mortgages are regulated by the Mortgages Decree.  In the 
case of default, the property is sold after obtaining court 
approval.  A mortgage must be registered under the Land 
Title Registration Law, a requirement that is mandatory for 
it to take effect.  Registration with the Land Title 
Registry is a reliable system of recording the transaction. 
 
The protection of intellectual property is an evolving area 
of law in Ghana.  Progress has been made in recent years to 
afford protection under both local and international law. 
Ghana is a party to the Universal Copyright Convention and 
a member of the World Intellectual Property Organization 
(WIPO), the English-speaking African Regional Industrial 
Property Organization (ESARIPO), and the World Trade 
Organization (WTO).  Ghana?s Parliament in 2004, ratified 
the WIPO internet treaties, namely the WIPO Copyright 
Treaty and the WIPO Performance and Phonograms Treaty. 
Since December 2003, Ghana?s Parliament has passed all six 
bills designed to bring Ghana into compliance with WTO 
TRIPS (Trade-Related Aspects of Intellectual Property 
Rights) requirements.  The new laws are:  Copyright, Trade 
Marks, Patents, Layout-Designs (Topographies) of Integrated 
Circuits, Geographical Indications, and Industrial Designs. 
Implementing legislation necessary for fully effective 
implementation has not been passed. 
 
Piracy of protected goods is known to take place, though 
there is no reliable information on the scale of this 
activity.  In cases where trademarks have been 
misappropriated, the price and quality disparity is usually 
readily apparent.  Holders of intellectual property rights 
have access to local courts for redress of grievances, 
although few trademark, patent, and copyright infringement 
cases have been filed in Ghana. 
 
A.8. Transparency of the Regulatory System 
 
The Government of Ghana?s policies of trade liberalization 
and investment promotion are guiding its effort to create a 
clear and transparent regulatory system.  The GIPC law 
codified the government's desire to present foreign 
investors with a liberal and transparent foreign investment 
regulatory regime.  The GIPC has established a ?one-stop 
shop? to facilitate business registration for investors, 
but it is not really a "one-stop shop."  It serves more as 
a facilitating mechanism.  A new Charter was launched in 
November 2007 under the public sector reform Program, under 
which time frames within which government officials must 
perform specific duties have been set and are monitored. 
 
The Government of Ghana has established regulatory bodies 
such as the National Communications Authority, the National 
Petroleum Authority, and the Public Utilities Regulatory 
Commission to oversee activities in the telecommunications, 
power, and water sectors.  The creation of these bodies was 
a positive step but they remain relatively under-resourced 
and subject to political influence, which limits their 
ability to deliver the intended level of oversight. 
 
A.9. Efficient Capital Markets and Portfolio Investment 
 
Private sector growth in Ghana has been constrained by 
limited financing opportunities for private investment. 
Almost two decades after the beginning of financial sector 
reforms in 1988, much remains to be done.  Confidence in 
the financial sector has suffered because of a legacy of 
government interventions, many of which did not facilitate 
the free flow of financial resources in the product and 
input markets.  While credit to the private sector has 
increased, the high interest rates on bank loans (in the 20 
percent range) continue to be an impediment to raising 
capital on the local market. 
 
Banks in Ghana are relatively small.  The largest in the 
country, Ghana Commercial Bank (GCB), has a net worth of 
approximately USD 92 million.  Out of the 23 banks in 
Ghana, the government has a majority ownership position in 
GCB and fully owns two other banks.  The GCB in May 2007 
issued new shares for sale on the Ghana Stock Exchange, 
 
ACCRA 00000089  008 OF 011 
 
 
which resulted in a further reduction of the government 
ownership.  The Bank of Ghana, under its 2004 universal 
banking policy, increased capital requirements for 
establishing a bank to 70 billion (old)cedis (USD 7.2 
million).  This level applies to both foreign and Ghanaian- 
owned banks.  The Bank of Ghana in October 2007 proposed a 
further increase in the minimum capital base for banks in 
Ghana to 50 to 60 million Ghana cedis (about $52m-$63m). 
The banks are expected to present their capitalization plan 
to the central bank by December 31, 2008 and meet the 
requirement by January 2009, but there is discussion of 
offering an additional six months grace period.  This new 
level applies to new banks entering the market.  In mid- 
2005, the Bank of Ghana lowered the official secondary 
reserve requirements for financial institutions from 35 to 
15 percent and finally abolished it in August 2006, so the 
total bank reserve requirement is now 9 percent. 
 
Some recent developments in the non-banking financial 
sector have been encouraging.  Among the non-banking 
financial institutions, leasing companies, building 
societies and savings and loan associations have been 
innovative in serving savers and borrowers.  In addition, 
the formulation of new regulatory policies for the Ghana 
Stock Exchange (which as of January 2008 had 35 listed 
companies, 2 government bonds and 4 corporate bonds and 
oversees portfolio investment) has been promising.  The 
Ghana Stock Exchange (GSE) was one of the best performing 
bourses in emerging markets in 2003 and 2004, it fell 
substantially in 2005 and then improved marginally in 2006 
and 2007.  It is open to all foreign buyers, subject to the 
restrictions described in section 7.5, paragraph 3.  Both 
foreign and local companies are allowed to list on the GSE. 
The Securities Regulatory Commission regulates the 
activities on the Exchange. 
 
A.10. Political Violence 
 
Ghana offers a relatively stable and predictable political 
environment for American investors.  Ghana has a solid 
democratic tradition, completing its fourth consecutive 
democratic election in 2004.  There is no indication at 
present that the level of political risk in Ghana will 
change markedly over the near term.  Incumbent President 
John Agyekum Kufuor of the New Patriotic Party will 
complete his second, and final, four-year term in 2008. 
The 2008 election will be keenly contested and there is the 
possibility of some election-related violence. 
 
A.11. Corruption 
 
Corruption in Ghana is somewhat less prevalent than in 
other countries in the region, and no U.S. firms have 
identified corruption as the main obstacle to foreign 
direct investment.  However, there is a growing perception 
in Ghana that government-related corruption is on the rise. 
In 2007, Ghana's score and ranking, however, showed a 
slight improvement over the 2006 Transparency International 
Global Corruption Perceptions Index. 
 
Ghana is not a signatory to the OECD Convention on 
Combating Bribery.  It has, however, taken steps to amend 
laws on public financial administration and public 
procurement.  The public procurement law, passed in January 
2004, seeks to harmonize the many public procurement 
guidelines used in the country and also to bring public 
procurement into conformity with WTO standards.  The new 
law aims to improve accountability, value for money, 
transparency and efficiency in the use of public resources. 
However, some in civil society have criticized it as 
inadequate.  The government, in conjunction with civil 
society representatives, is drafting a Freedom of 
Information bill, which will allow greater access to public 
information.  Notwithstanding the new 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. 
 
American businesses have reported being asked for "favors" 
from contacts in Ghana, in return for facilitating business 
transactions.  These favors could potentially conflict with 
U.S. business ethics or laws, and U.S. business visitors 
should make clear that U.S. companies operating abroad are 
subject to the Foreign Corrupt Practices Act of 1977. 
 
Commercial fraud in the form of scams, especially in gold 
or currency deals, is on the rise in Ghana.  These are 
 
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commonly termed "419" scams.  While these cases are 
exceptions and not the rule to doing business in Ghana, 
potential buyers of gold and diamond are strongly advised 
to deal directly with the Precious Minerals Marketing 
Company (PMMC) in Ghana.  Gold and diamonds can be exported 
legally from Ghana only through the PMMC, and prices are 
based solely on the London Exchange price on the day of 
export.  No discounting or negotiation of prices prior to 
export by the PMMC is valid.  U.S. firms can request a 
background check on companies and individuals with whom 
they wish to do business by using the U.S. Commercial 
Service's International Company Profile (ICP).  Requests 
for ICPs should be made through the nearest U.S. Export 
Assistance Center.  For more information about the U.S. 
Commercial Service, visit www.buyusa.gov/ghana. 
 
The Government of Ghana has publicly committed to ensuring 
that government officials do not use their positions to 
enrich themselves.  Official salaries, however, are modest, 
especially for low-level government employees, and such 
employees have been known to ask for a "dash" (tip) in 
return for assisting with license and permit applications 
 
The 1992 Constitution provided for the establishment of a 
Commission for Human Rights and Administrative Justice 
(CHRAJ).  Among other things, the Commission is charged 
with investigating all instances of 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 Commission has a mandate to 
prosecute alleged offenders when there is sufficient 
evidence to initiate legal actions.  The Commission, 
however, is under-resourced and few prosecutions have been 
made since its inception. 
 
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 that cause a loss to the 
state.  SFO's 1999 report to the President and Parliament 
reported cases of economic fraud that resulted in more than 
USD 2 million in losses to the country.  The SFO has called 
for a national debate on how to deal with largesse acquired 
through economic crimes since the present punishment of 
dismissal and imprisonment is an inadequate deterrent.  A 
law to revise the SFO law is being drafted and it is 
expected to deal with proceeds of crime.  The government 
has announced plans to streamline the roles of the CHRAJ 
and SFO, in order to remove their duplication of efforts. 
Government passed the ?Whistle Blower? law in July 2006. 
This law is expected to encourage Ghanaian citizens to 
volunteer information on corrupt practices to appropriate 
government agencies.  The Freedom of Information bill,is 
yet to be passed. In December 2006, CHRAJ issued guidelines 
on conflict of interest to public sector workers. 
 
¶B.  Bilateral Investment Agreements 
 
Ghana has bilateral investment agreements with: the United 
Kingdom; People's Republic of China; Romania; Denmark; and 
Switzerland.  These agreements were signed and ratified 
between 1989 and 1992.  Italy and France are negotiating 
similar arrangements.  Agreements with Germany, India, 
Pakistan, South Korea, North Korea, and Belgium are being 
considered.  The United States signed three agreements 
between 1998 and 2000: the OPIC Investment Incentive 
Agreement, the Trade and Investment Framework Agreement 
(TIFA), and the Open Skies Agreement. 
 
Ghana has met eligibility requirements to participate in 
the benefits afforded by the African Growth and Opportunity 
Act (AGOA) and also qualified for the apparel benefits 
under AGOA. 
 
¶C.  OPIC and Other Investment Insurance Programs 
 
OPIC is active in Ghana, and OPIC officers visit Ghana 
periodically to meet with representatives of American and 
Ghanaian firms.  OPIC has launched several investment 
funds, which are sources of information and financing for 
investment in Ghana.  The African Project Development 
Facility (APDF) and the African investment program of the 
International Finance Corporation are other sources of 
information.  Ghana is a member of the World Bank Group?s 
Multilateral Investment Guarantee Agency (MIGA). 
 
¶D.  Labor 
 
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Ghana has a large pool of relatively inexpensive and 
unskilled labor.  English is widely spoken, especially in 
urban areas.  Labor regulations and policies are generally 
favorable to business.  Labor-management relations are 
fairly good. A revised Labor law (Act 651) passed in 2003 
became effective in March 2004.  The new law unified and 
modified the old labor laws to bring them into conformity 
with the core principles of the International Labor 
Convention, to which Ghana is a signatory.  All the old 
labor related laws, except the Children's Law (Act 560), 
have been repealed. 
 
Under the 2003 Labor Law, the Chief Labor Officer issues 
collective bargaining agreements (CBA) in lieu of the Trade 
Union Congress (TUC).  This effectively limits the TUC's 
monopoly, since the old CBA provisions implicitly compelled 
all unions to be part of TUC.  Also, instead of the labor 
court, a National Labor Commission has been established to 
resolve labor and industrial disputes.  Finally, the 
Tripartite Committee that determines the minimum daily wage 
now has legal backing, and public and private employment 
centers can be created to help job seekers find work. 
 
There is no legal requirement for labor participation in 
management.  However, joint consultative committees in 
which management and employees meet to discuss issues 
affecting business productivity are common. 
 
There are no statutory requirements for profit sharing, but 
fringe benefits in the form of year-end bonuses and 
retirement benefits are generally included in collective 
bargaining agreements. 
 
Post recommends consulting a local attorney regarding labor 
issues.  The U.S. Embassy in Accra maintains a list of 
local attorneys, which is available on the US Embassy?s web 
site www.accra.usembassy.gov or upon request. 
 
¶E.  Foreign Trade Zones/Free Ports 
 
Free Trade Zones were established in May 1996, one near 
Tema Steelworks, Ltd., in the Greater Accra Region, and two 
other sites located at Mpintsin and Ashiem near Takoradi. 
The seaports of Tema and Takoradi, as well as the Kotoka 
International Airport and all the lands related to these 
areas, are part of the free zone.  The law also permits the 
establishment of single factory zones outside or within the 
areas mentioned above.  Under the law, a company qualifies 
to be a free zone company if it exports more than 70 
percent of its products.  Among the incentives for free 
zone companies are a ten-year corporate tax holiday and 
zero duty on imports. 
 
To make it easier for free zone developers to acquire the 
various licenses and permits to operate, the Ghana Free 
Zones Board (www.gfzb.com) provides a "one-stop approval 
service" to assist in the completion of all formalities.  A 
lack of resources has limited the effectiveness of the 
Board, however.  To further facilitate operations in the 
zones, nationals of OECD countries, East Asian countries, 
and the Republic of South Africa may with advance notice 
obtain entry visas at the international airport in Accra. 
However, all foreign employees of businesses established 
under the program will require work and residence permits. 
¶F.  Major Foreign Investors in Ghana 
 
Major foreign investments in Ghana are mainly in mining, 
off-shore oil exploration and manufacturing.  Great Britain 
is Ghana's leading foreign investor with direct investment 
exceeding USD 750 million.  Major U.S. investors are 
Chevron West Africa Gas Ltd. (West Africa Gas Pipeline 
construction), Regimanuel Gray Limited (housing and 
construction), Affiliated Computer Services (data 
processing), and Newmont Mining (gold mining). 
 
¶G.  Foreign Direct Investment (FDI) Statistics 
 
FDI (USD million)QFDI as share of GDP (%) 
 
2000                   165.9QQQ3.3 
2001                    89.3QQQ1.7 
2002                    58.9QQQ0.9 
2003                   136.6QQQ1.8 
2004 QQQ   139.7QQQ1.6 
2005 QQQ   145.0QQQ1.4 
2006QQQQ   434.5QQQ1.4 
2007*       QQ   303.6QQQ3.5 
 
 
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Source: Bank of Ghana, International Monetary Fund (IMF) 
* ? provisional 
 
End Text. 
 
BRIDGEWATER