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TAGS: EPET ETRD KPTD OPIC USTR GH
SUBJECT: 2010 Investment Climate Statement - Ghana 
 
------------------------------ 
Openness to Foreign Investment 
------------------------------ 
¶1.  Attracting foreign direct investment continues to be a priority 
for the government of Ghana.  The Mills Government, which came to 
power in January 2009, has maintained the encouragement of foreign 
investment in Ghana as an integral part of Ghana's economic policy. 
 
¶2.  The Government of Ghana recognizes that attracting foreign 
direct investment requires an enabling legal environment.  The 
Government passed laws to encourage foreign investment and replaced 
regulations perceived as unfriendly to investors.  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. 
¶3.  The GIPC law 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. 
¶4.  The GIPC law specifies areas of investment reserved for 
Ghanaians, which include 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. 
¶5.  The GIPC registers investments and provides assistance to enable 
investors to become established and take advantage of relevant 
incentives.  GIPC registration can be filled out 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. 
¶6.  Once all necessary documents are submitted, the GIPC states that 
new investments will be registered within five working days. 
However, the actual time required for registration can be 
significantly higher (sometimes up to one month). 
¶7.  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 five 
government agencies including the GIPC, Registrar General 
Department, Internal Revenue Service (IRS), Ghana Immigration 
Service, and Social Security and National Insurance Trust (SSNIT). 
 
¶8.  Nevertheless, the government's reforms in this area have yielded 
some returns.  According to The World Bank's Doing Business 2010 
report issued in 2009, the average time to start a business in Ghana 
is 33 days.  This is a significant improvement from the 129 days it 
took in 2003. Nonetheless, Ghana still ranks 135th out of 181 
countries surveyed by the World Bank.  In terms of overall ease of 
doing business, the report ranks Ghana 92nd, down from 87th in 2009. 
 
¶9.  The GIPC requires foreign investors to satisfy a minimum capital 
requirement.  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 does not apply to 
portfolio investment, enterprises set up for export trading or 
branch offices. 
¶10.  The principal law regulating investment in minerals and mining 
is the Minerals and Mining Act, 2006 (Act 703).  This law addresses 
different types of mineral rights, issues relating to incentives and 
guarantees, and land ownership.  The 2006 law provides for a 
stability agreement, which protects the holder of a mining lease 
from future changes in law that may impose huge financial burden on 
the license holder for a period of 15 years.  When investment 
exceeds USD500 million, a development agreement can be negotiated 
which contains elements of a stability agreement and a more 
favorable fiscal terms.  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. 
 
¶11.  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.  Following a significant oil discovery in Ghana in 2007, a 
new bill, Ghana Petroleum Regulatory Authority Bill, seeks to 
separate GNPC's current role as regulator and player.  However, this 
bill has not yet been passed, and will likely be taken up in 2010 by 
Parliament.  Several U.S. companies currently are involved in the 
oil and gas sector in Ghana. 
¶12.  There are no 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, fishing, mining and real estate.  Regarding real 
estate, the 1992 Constitution recognized existing private and 
traditional title to land; however, freehold acquisition of land is 
no longer permitted.  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. 
¶13.  The U.S. Embassy in Accra advises companies or individuals 
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 (http://ghana.usembassy.gov) or upon 
request. 
 
¶14.  The following table includes third-party assessments of the 
Ghanaian investment climate: 
 
MEASURE                     YEAR   INDEX/RANKING 
TI Corruption Index         2009   3.9 (67/180) 
Heritage Economic Freedom   2009   58.1 (96/179) 
World Bank Doing Business   2009   92/183 
MCC Gov't Effectiveness     2009   0.72 (98 percent) 
MCC Rule of Law             2009   0.80 (95 percent) 
MCC Control of Corruption   2009   0.72 (97 percent) 
MCC Fiscal Policy           2009   -9.7 (2 percent) 
MCC Trade Policy            2009   65.3 (40 percent) 
MCC Regulatory Quality      2009   0.71 (100 percent) 
MCC Business Start Up       2009   0.95 (73 percent) 
MCC Land Rights Access      2009   0.726 (81 percnt) 
MCC Natural Resource Mgmt   2009   64.02 (54 percent) 
 
Percent rankings for MCC measures indicate a percentile within peer 
income group. 
 
-------------------------------- 
Conversion and Transfer Policies 
-------------------------------- 
 
¶15.  Ghana operates a free-floating exchange rate regime.  Ghana's 
local currency, the Ghana cedi, can be exchanged for dollars and 
major European currencies.  Investors may convert and transfer funds 
associated with investments provided there is documentation of how 
the funds were acquired.  For details, consult the GIPC Act and the 
Foreign Exchange Act. 
¶16.  In July 2007, the government redenominated the cedi by removing 
4 zeroes.  As of January 1, 2008, the new currency, the Ghana cedi 
(GHC)(notes) and Ghana pesewa (coins) are the only currency in 
circulation.  As of January 2010, one USD was equal to about 1.424 
GHC and the largest bill is 50 GHC. 
¶17.  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 
became quite stable from 2003 to 2007, bolstered by sound 
macroeconomic policies, record levels of remittances and favorable 
cocoa and gold prices.  High oil import bill and demand for non-oil 
imports in 2008, however, caused the cedi to depreciate by about 22 
and 19 percent in 2008 and 2009 respectively. 
¶18.  Ghana's investment laws guarantee that investors can transfer 
the following in convertible currency out of Ghana:  dividends or 
net profits attributable to an investment; loan service payments 
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. 
¶19.  There is no legal parallel remittance system for investors. 
The Parliament passed the Foreign Exchange Act in November 2006. 
The Act provided the legal framework for the management of foreign 
exchange transactions in Ghana.  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. 
------------------------------ 
Expropriation and Compensation 
------------------------------ 
 
¶20.  Ghana's investment laws provide guarantees against 
expropriation and nationalization (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. 
¶21.  American investors are generally not subject to differential or 
discriminatory treatment in Ghana, and there have been no official 
government expropriations in recent times.  Since 2001, two U.S. 
investors have filed for international arbitration against the Ghana 
government, claiming expropriation.  These cases were resolved when 
the Government of Ghana agreed to purchase the investments. 
Nonetheless, in both cases the U.S. investors agreed to the terms of 
the government purchase as an exit strategy, notwithstanding 
perceived inequitable terms. 
------------------ 
Dispute Settlement 
------------------ 
 
¶22.  Ghana's legal system is based on British common law. Investors 
should note that the acquisition of real property (land) is governed 
by both statutory and customary law. 
¶23.  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 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. 
¶24.  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 succeeded in consistently disposing of cases within 
six months.  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. 
¶25.  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 American courts are not currently enforceable in Ghana. 
¶26.  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. 
¶27.  The United States has signed three bilateral agreements on 
trade and investment with Ghana: the OPIC Investment Incentive 
Agreement, the Trade and Investment Framework Agreement (TIFA), and 
the Open Skies Agreement.  These agreements contain some provisions 
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. 
¶28.  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 Commercial Conciliation Center of the 
American Chamber of Commerce (Ghana) provides arbitration services 
on trade and investment issues. 
¶29.  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, for disputes within the energy sector, the 
government has expressed a preference for handling disputes under 
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"). 
--------------------------------------- 
Performance Requirements and Incentives 
--------------------------------------- 
 
¶30.  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.  In the case of banks, the opening of branches 
requires approval from the central bank.  Investors are not required 
to purchase from local sources.  Investors are not required to 
export a specified percentage of their output, except for free zone 
enterprises operating under the Free Zone Act, which must export 70 
percent of their products. 
¶31.  Foreign investors are not required by law to have local 
partners except in the fishing, insurance, and mining industries. 
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.  There is compulsory local 
participation in the extractive sector:  by law, the Government of 
Ghana acquires an automatic ten percent of all interests in mining 
and oil and gas ventures (a carried interest, at no cost to the 
government).  The 2006 Minerals and Mining law, however, allows the 
government of Ghana to negotiate any other form of participation. 
¶32.  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 local employment requirement 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. 
¶33.  Ghana regulates the transfer of technologies 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 obligations to procure personnel, inputs, and 
equipment from the transferor or specific source.  The duration of 
related contracts cannot 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. 
¶34.  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.  Tax incentives vary 
depending upon the sector in which the investor is operating. 
¶35.  All investment-specific laws contain some 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 on) these production items.  The Government of 
Ghana recently imposed a five percent import duty on some items that 
were previously zero-rated, to conform with the ECOWAS common 
external tariff. 
¶36.  The Ghanaian tax system is replete with tax concessions that 
considerably reduce the effective tax rate.  The minimum incentives 
are specified in the GIPC law and are not applied in an ad hoc or 
arbitrary manner.  Once an investor has been registered under the 
GIPC law, the 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. 
¶37.  The GIPC website (www.gipc.org.gh) provides a thorough 
description of available incentive programs.  The law also 
guarantees an investor all the tax incentives provided for under 
Ghanaian law.  For example, rental income from commercial and 
residential property is exempt from tax for the first five years 
after construction.  Similarly, income from a company selling or 
leasing 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. 
¶38.  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) and oil and gas exploration companies (35 
percent).  For some sectors there ar tax holidays for a period 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 zero 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. 
¶39.  The government charges a 12.5 percent VAT plus a 2.5 percent 
Health Insurance Levy 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. 
¶40.  Ghana has no discriminatory or excessively burdensome 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.  Several U.S. firms have recently 
reported extensive delays in receiving the work permits to which 
they are entitled by their investment levels. 
¶41.  Ghana has no import price controls.  It is pursuing a 
liberalized import regime policy within the framework 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. 
 
-------------------------------------------- 
Right to Private Ownership and Establishment 
-------------------------------------------- 
 
¶42.  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 4). 
¶43.  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. 
¶44.  Private and public enterprises compete on an equal basis with 
respect to access to credit, markets, licenses, and supplies. 
----------------------------- 
Protection of Property Rights 
----------------------------- 
 
¶45.  The legal system recognizes and enforces secured interest in 
property, both chattel and real property. The process to get clear 
title over land is often difficult, complicated, and 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. 
¶46.  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. 
¶47.  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 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.  Except for the Copyright law, implementing legislation 
necessary for fully effective promulgation has not been passed. 
¶48.  Piracy of intellectual property is known to take place. 
Although precise statistics are not available for many sectors, 
there is evidence that the proportion of counterfeits is high for 
products such as software and (to a lesser extent) pharmaceuticals. 
Counterfeit products have also been discovered from such disparate 
sectors as industrial epoxy, cosmetics and household cleaning 
products.  Based on cases where it has been possible to trace the 
orgin of counterfeit goods, most (although not all) have been found 
to have been produced outside the region (usually in Asia).  Holders 
of intellectual property rights have access to local courts for 
redress of grievances, although the few trademark, patent, and 
copyright infringement cases that have been filed in Ghana by U.S. 
companies are reported to move through the legal system slowly. 
------------------------------------- 
Transparency of the Regulatory System 
------------------------------------- 
 
¶49.  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" for investment registration. In 
practice, it does not really operate as a "one-stop shop;" it serves 
more as a facilitating mechanism. 
¶50.  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, downstream petroleum, 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. 
--------------------------------------------- ----- 
Efficient Capital Markets and Portfolio Investment 
--------------------------------------------- ----- 
 
¶51.  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 within the 
country.  While credit to the private sector has increased, the high 
interest rates on bank loans (in the 30 percent range) continue to 
be an impediment to raising capital on the local market. 
¶52.  Banks in Ghana are relatively small.  The largest in the 
country, Ghana Commercial Bank (GCB), has a net worth of 
approximately USD 150 million.  Out of the 26 banks in Ghana, the 
government has a majority ownership position in GCB and fully owns 
two other banks.  Under the central bank's new minimum capital 
requirement for banks, existing banks with majority foreign 
ownership had to increase their capital base to GHC 60 million 
(approximately USD 42 million) from GHC 7 million (approximately USD 
5.0 million) by December 31, 2009, while banks with Ghanaian 
majority share ownership (local banks) will first have to increase 
their capital base to GHC 25 million by December 31, 2009, and have 
until 2012 to fully increase it to GHC 60 million.  This new level 
applies to new banks entering the market.  The Bank of Ghana 
abolished official secondary reserve requirements for financial 
institutions in 2006.  The banking reserve requirement is now 9 
percent. 
¶53.  Recent developments in the non-banking financial sector 
indicate increased diversification.  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 (GSE)(which as of December 2009 had 36 
listed companies, 3 government bonds and 1 corporate bond and 
oversees portfolio investment) has had varied performance.  The 
Ghana Stock Exchange (GSE) was one of the best performers among 
emerging markets in 2007, but in 2008 it was one of the worst 
performers, recording a decline of 47.9 percent.  It is open to all 
foreign buyers.  Both foreign and local companies are allowed to 
list on the GSE.  The Securities Regulatory Commission regulates the 
activities on the Exchange. 
 
---------------------------------------- 
Competition from State-Owned Enterprises 
---------------------------------------- 
 
¶54.  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.  Given privatization efforts over the past decade, only a 
handful of state-owned enterprises remain, some of which are in poor 
financial condition.  The government also pursues partial 
privatization through selling equity stakes in state-owned 
enterprises on the GSE. 
¶55.  The Divestiture Implementation Committee (www.dic.com.gh) 
oversees most privatization efforts.  Actual divestiture is usually 
done through a bidding process; bidders 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, tax paying, productive ventures employing 
Ghanaians.  Generally, foreign investors constitute the interested 
bidders.  Few local investors have sufficient capital to participate 
in divestitures, but local firms may partner with foreign firms. 
-------------------------------Corporate Social Responsibility 
------------------------------- 
 
¶56.  Corporate social responsibility (CSR) is of growing concern 
among Ghanaian companies.   The Ghana 100 is a ranking of the top 
performing companies.  It is based on several criteria, including a 
10 percent weight assigned to corporate social responsibility, 
including philanthropy.  Consumers do not generally demand CSR 
activities from all companies, but they expect them from companies 
engaged in the extractive industries.  Local communities where 
foreign firms reap a profit from natural resources expect those 
firms to give back to the communities in which they are active. 
 
¶57.  Foreign and local enterprises do not tend to follow CSR 
guidelines such as the OECD Guidelines for Multinational 
Enterprises. 
 
------------------ 
Political Violence 
------------------ 
 
¶58.  Ghana offers a relatively stable and predictable political 
environment for American investors.  Ghana has a solid democratic 
tradition, completing its fifth consecutive democratic election in 
December 2008.  There is no indication at present that the level of 
political risk in Ghana will change markedly over the near term. 
Ex-president John Agyekum Kufuor of the New Patriotic Party 
completed his second, and final, four-year term in 2008 and 
peacefully handed over power to the National Democratic Congress's 
John Atta-Mills, who began a four-year term in January 2009.  The 
2008 election was keenly contested but generally peaceful and 
conducted transparently in a free and fair manner. 
---------- 
Corruption 
---------- 
 
¶59.  Corruption in Ghana is comparatively less prevalent than in 
other countries in the region, although it remains a problem. 
However, a few U.S. firms have identified corruption as the main 
obstacle to foreign direct investment.  Since 2006, Ghana's score 
and ranking on the Transparency International Global Corruption 
Perceptions Index has improved slightly. 
¶60.  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 the law as inadequate.  The government, in 
conjunction with civil society representatives, drafted and 
presented to Parliament in November 2009, the 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. 
¶61.  American businesses report 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.  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. 
¶62.  Commercial fraud in the form of scams, especially in gold or 
currency deals, is frequent in Ghana.  These are commonly termed 
"419" scams.  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. 
¶63.  The 1992 Constitution established the Commission for Human 
Rights and Administrative Justice (CHRAJ).  Among Qer 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 investigate 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. 
¶64.  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.   A law to revise the SFO law is being drafted and it 
is expected to define more clearly treatment of the 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. 
 In December 2006, CHRAJ issued guidelines on conflict of interest 
to public sector workers.  In December 2009 CHRAJ and the government 
issued a new Code of Conduct for Public Officers in Ghana with 
guidelines on conflicts of interest.  A Freedom of Information bill 
is still pending in Parliament. 
------------------------------- 
Bilateral Investment Agreements 
-------------------------------- 
 
¶65.  Ghana has bilateral investment agreements with the following 
countries: 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. 
¶66.  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. 
-------------------------------------------- 
OPIC and Other Investment Insurance Programs 
-------------------------------------------- 
 
¶67.  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). 
------ 
Labor 
------ 
 
¶68.  Ghana has a large pool of unskilled labor.  English is widely 
spoken, especially in urban areas.  Labor regulations and policies 
are generally favorable to business.  Although labor relations are 
in general positive, there are occasional labor disagreements 
stemming from wage policies in Ghana's inflationary environment. 
Many employers find it advantageous to maintain open lines of 
communication on wage calculations and incentive packages.  A 
revised Labor Law of 2003 (Act 651) 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. 
¶69.  Under the Labor Law, the Chief Labor Officer issues collective 
bargaining agreements (CBA) in lieu of the Trade Union Congress 
(TUC).  This change limited the TUC's influence, since the prior CBA 
provisions implicitly compelled all unions to be part of TUC.  Also, 
instead of the labor court, a National Labor Commission was 
established to resolve labor and industrial disputes.  Finally, the 
Tripartite Committee that determines the minimum daily wage was 
given legal authority. 
¶70.  There is no legal requirement for labor participation in 
management.  However, many businesses utilize joint consultative 
committees in which management and employees meet to discuss issues 
affecting business productivity and labor issues. 
¶71.  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. 
¶72.  Post recommends consulting a local attorney for detailed advice 
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 
http://ghana.usembassy.gov or upon request. 
------------------------------ 
Foreign Trade Zones/Free Ports 
------------------------------ 
 
¶73.  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. 
¶74.  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. 
-------------------------------- 
Major Foreign Investors in Ghana 
-------------------------------- 
 
¶75.  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); Kosmos Energy, Anadarko, Hess, and 
Vanco (oil and gas exploration);  Newmont Mining (gold mining); 
Archer Daniels Midland, CargillQcoa processing); and Affiliated 
Computer Services (data processing). 
------------------------------------------ 
Foreign Direct Investment (FDI) Statistics 
------------------------------------------ 
 
¶76. The following table shows recent dramatic growth in FDI in 
Ghana. 
 
      FDI (USD million)  FDI as share of GDP (percent) 
2000       165.9                     3.3 
2001        89.3                     1.7 
2002        58.9                     0.9 
2003       136.6                     1.8 
2004       139.7                     1.6 
2005       145.0                     1.4 
2006       434.5                     3.5 
2007       970.4                     6.4 
2008     2,111.6                     13.2 
2009*      660.3                     4.3 
* Provisional figure for - Jan. to Sep. 2009 
Source: Bank of Ghana, International Monetary Fund (IMF) 
 
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