The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption. 

Executive Summary 

Ghana’s economy had expanded at an average of seven percent per year since 2017 until the coronavirus pandemic reduced growth to 0.4 percent in 2020, according to the Ministry of Finance. Between 2017 and 2019, the fiscal deficit narrowed, inflation decreased, and GDP growth rebounded, driven primarily by increases in oil production. Ghana saw a 9 percent growth rate in the first quarter of 2019 and closed that year with a 6.5 percent GDP growth rate.  Indicating a recovery from the pandemic, the Ghana Statistical Service reported a 6.6 percent growth rate in the third quarter of 2021, marking the fastest growth in GDP since the pandemic began.  The International Monetary Fund (IMF) expected growth to rebound to 4.7 percent in 2021 from the shock of COVID-19 and by 6.2 percent in 2022. The economy remains highly dependent on the export of primary commodities such as gold, cocoa, and oil, and consequently is vulnerable to slowdowns in the global economy and commodity price shocks. In November 2020, Ghana launched the 100 billion cedi (about $13 billion) Ghana COVID-19 Alleviation and Revitalization of Enterprises Support (Ghana CARES) Program to address the effects of the virus on the economy. In 2020, the government also launched Ghana’s National Adaptation Plan Process by which it expects to develop strategies to build resilience against the impacts of both climate change and crises such as COVID-19. In general, Ghana’s investment prospects remain favorable, as the Government of Ghana seeks to diversify and industrialize through agro-processing, mining, and manufacturing.  It has made attracting foreign direct investment (FDI) a priority to support its industrialization plans and to overcome an annual infrastructure funding gap. 

Challenges to Ghana’s economy include high government debt, particularly energy sector debt, low internally generated revenue, and inefficient state-owned enterprises.  Ghana has a population of 31 million, with over 14 million potential taxpayers, but only six million of whom filed their annual tax returns.  As Ghana seeks to move beyond dependence on foreign aid, it must develop a solid domestic revenue base.  On the energy front, Ghana has enough installed power capacity to meet current demand, but it needs to reduce the cost of electricity by improving the management of its state-owned power distribution system. 

Among the challenges hindering foreign direct investment are: costly and difficult financial services, lack of government transparency, corruption, under-developed infrastructure, a complex property market, costly and intermittent power and water supply, the high costs of cross-border trade, a burdensome bureaucracy, and an unskilled labor force.  Enforcement of laws and policies is weak, even where good laws exist on the books.  Public procurements are sometimes opaque, and there are often issues with delayed payments.  In addition, there have been troubling trends in investment policy over the last six years, with the passage of local content regulations in the petroleum, power, and mining sectors that may discourage needed future investments. 

Despite these challenges, Ghana’s abundant raw materials (gold, cocoa, and oil/gas), relative security, and political stability, as well as its hosting of the African Continental Free Trade Area (AfCFTA) Secretariat make it stand out as one of the better locations for investment in sub-Saharan Africa.  There is no discrimination against foreign-owned businesses.  Investment laws protect investors against expropriation and nationalization and guarantee that investors can transfer profits out of the country, although international companies have reported high levels of corruption in dealing with Ghanaian government institutions.  Among the most promising sectors are agribusiness and food processing; textiles and apparel; downstream oil, gas, and minerals processing; construction; and mining-related services subsectors. 

The government has acknowledged the need to strengthen its enabling environment to attract FDI, and is taking steps to overhaul the regulatory system, improve the ease of doing business, and restore fiscal discipline. 

To access the full text of the 2022 ICS, visit the U.S. Department of State Investment Climate Statements website.