Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
The distribution channels available for U.S. suppliers of goods and services include wholesalers, retail outlets, and agents or distributors.
When talking to potential distributors/sellers in Ghana, an important issue to consider is potential changes in product shelf life given the warm and humid climate in the country.
Major cities in Ghana for U.S. goods and services roughly correlate with population size:
• Accra/Tema Metropolitan area (2.4 million people)
• Kumasi (2.1 million)
• Takoradi (728,000)
• Tamale (275,000)
• Sunyani (252,0000
Goods primarily enter Ghana via sea or air (including air freight, courier services, air parcel post and express). Because deliveries can sometimes be delayed, it is important to allow extra time when preparing delivery timetables. Also, it is advisable to ensure that required documentation is in order prior to transit – as incorrect or incomplete document can add extra time to delivery schedules. A freight forwarder is recommended to increase the chances of a smooth transit of goods to Ghana.
Currently, all goods enter Ghana through one of two main seaports -Tema or Takoradi - or via Kotoka International Airport in Accra. Problems have been reported with expeditious clearing of goods through the ports including some reports of solicitations for bribes from port and customs officials.
Note: Imported or locally manufactured goods can be stored under customs control in a government or private bonded warehouse without payment of import duty or other taxes to allow deferment of tax liabilities until the goods are needed for consumption or are exported.
Using an Agent to Sell U.S. Products and Services
While it is not legally required by Ghanaian law to do so (in most cases), the U.S. Commercial Service Ghana has noted that U.S. companies who retain a local, experienced representative in Ghana experience a greater level of success when entering the market. For this reason, U.S. companies should consider engaging a local business partner to help them succeed in the Ghanaian market. In some industry sectors, notably the oil and gas sector, U.S. firms may be required to operate through a local partner.
When choosing a Ghanaian business partner, some important factors are:
- The local agent or distributor chosen understands the local economy and import/export regulations;
- The potential business partner has enough experience working with international companies in the same or a related sector;
- The Ghanaian company shares the same expectations as its potential U.S. partner. It is common for West African companies to overestimate the viability of commercial opportunities in their markets.
- If the exported product requires maintenance and servicing, qualified personnel and a reasonable inventory of spare parts will be available for buyers;
- Whether exclusivity is a priority for a distributor or agent (note that most agents and distributors in Ghana represent several product lines so an exclusive agent/distributor may be more difficult to find)
- The agent or distributor has been subject to thorough due diligence. (Based on experience with U.S. companies who did not conduct due diligence prior to commencing a business relationship in Ghana, we highly recommend this step.)
The U.S. Commercial Service Ghana can assist U.S. companies in finding a local business partner or conducting due diligence on a potential partner. Please see the following link for more information on the services offered: https://www.trade.gov/all-services.
Establishing an Office
The main types of business entities in Ghana (similar to those found in the United States) are:
1. Companies, including branches of foreign firms;
2. Partnerships and joint ventures;
3. Sole proprietorships;
Under Ghana’s Companies’ Code, the following forms of business are allowed:
1. Limited Liability Company – liability of members limited to amount, if any, unpaid on shares respectively held by it;
2. Company Limited by Guarantee – liability of members limited to amount they respectively undertake to contribute to the assets of the company in the event of its being liquidated;
3. Unlimited Company – no limit on liability of members
Note: Ghana does not allow limited liability partnerships. A company may be registered as a public or private company. Every company with limited liability must include the word ‘Limited’ as the last word of its name. Companies incorporated in Ghana must have at least one shareholder and two directors, with one director resident in Ghana. Companies must file annual returns with the Registrar of Companies.
All foreign companies are required to register with the Ghana Investment Promotion Center (GIPC), the government agency responsible for foreign investment in the country. See main link to GIPC below: http://www.gipcghana.com
The purpose of GIPC is to act as a one-stop shop for economic, commercial and investment information for international companies and businesspeople interested in starting a business or investing in Ghana. Except for the extractive industries, international companies are free to establish a business in Ghana without prior approval of GIPC. However, the Ghanaian business environment is unique, and guidance can be extremely helpful. Also, certain tax benefits are available under the law, which make registration with GIPC beneficial.
More detailed information about setting up a business is available at the GIPC website at the following link: http://www.gipcghana.com/invest-in-ghana/doing-business-in-ghana.html.
Note that mining and oil & gas companies are required to obtain advance licensing/approval from the following government agencies:
Minerals Commission: http://www.mlnr.gov.gh/index.php
Petroleum Commission: http://www.petrocom.gov.gh/
The U.S. Commercial Service Ghana also advises that a local attorney be consulted prior to establishing a business in the country. The U.S. Commercial Service maintains an up-to-date list of attorneys in Ghana, several of whom have worked and/or studied in the United States. Generally, the cost for the service and registering of a business does not exceed $2,500.
There are about a dozen franchisees in the local economy with opportunities for expansion in this sector. There is currently no direct legislation governing the sector, however this is provided for under the recently passed Companies Act 2019 (Act 992). For a more detailed discussion, refer to the Franchising section under the Leading Sectors for U.S. Exports and Investments.
Direct marketing is not a well-established business model in Ghana. There are a very limited number of international direct marketing companies with an established presence. However, a recent increase in interest on the part of international direct marketing companies may indicate a future increase in this business method. The Ghanaian culture values extended networks of business, family and school contacts, a factor that could lead to success for products sold through a direct marketing distribution channel.
While the Ghanaian Investment Code encourages joint ventures, U.S. companies should take care that any joint venture arrangements clearly delineate the areas of responsibility for each party. In particular, financial arrangements should be discussed in detail and in advance. Some local entrepreneurs expect the foreign investor to bear all costs while their contribution is limited to local market expertise. Due diligence on a prospective partner is always advisable, as is retention of a local attorney.
Local content requirements in the petroleum sector have made joint ventures a more attractive approach to market entry. The U.S. Commercial Service Ghana advises all U.S. companies to carefully select a qualified partner and spend resources on conducting extensive due diligence before committing to a joint venture structure.
Multiple options are available for both inbound and outbound express delivery. FedEx, DHL, TNT Express, UPS, EMS and Aramex have operations in Ghana. There are no significant restrictions on the operations of express delivery services in Ghana; most firms work through a licensed agent.
The U.S. Commercial Service Ghana strongly advises U.S. companies to conduct due diligence on all potential new business partners in Ghana. The U.S. Commercial Service can assist with this by reviewing correspondence or documentation received from potential partners and/or via one of our due diligence services. Click on the link below for more details:
Trade Promotion Services
U.S. companies interested in trade-promotion services should contact the U.S. Commercial Service Ghana or the nearest U.S. Export Assistance Center (USEAC). To find contact details for the nearest USEAC, visit the following link: http://export.gov/usoffices/index.asp
Local Professional Services
A list of pre-vetted, local business service providers can be found on the U.S. Commercial Service Ghana Website, at the following link:
Principle Business Associations
American Chamber of Commerce Ghana
5th Crescent Street, Asylum Down
P.O. Box CT2869, Cantonments-Accra, Ghana
Tel: 233 030 2247562/233 030 7011862
Fax: 233 030 2247562
Association of Ghana Industries (AGI)
2nd Floor, Addison House
Trade Fair Centre, La-Accra
P.O. Box AN-8624
Accra North – Ghana
T: +233 (0) 30 277-9023
Ghana Chamber of Commerce & Industry
1st Floor, World Trade Center,
Opp. Children’s Park, National Theatre-Accra
P.O Box 2325, Accra
Tel: +233 (0) 30 266-2860