UKGCC survey highlights optimism amid challenges in Ghana’s business landscape
Despite persistent obstacles such as high machinery and land costs, the 2024 UK-Ghana Chamber of Commerce (UKGCC) Business Environment and Competitiveness Survey (BECS) reflects cautious optimism among businesses operating in Ghana.
The survey identifies opportunities in technology adoption and market expansion, even as the country’s business environment faces significant hurdles.
Challenges in the Business Landscape
According to the survey, 69% of respondents believe Ghana’s business environment trails behind regional and global peers. Persistent challenges include high energy costs, limited access to affordable financing, and burdensome regulatory processes. The cost of machinery and land remains particularly prohibitive, especially for small and medium enterprises (SMEs), which constitute the backbone of Ghana’s economy.
The manufacturing sector, a critical driver of economic activity, faces high production costs, including the rising cost of raw materials and energy. Although there have been marginal improvements in the availability of raw materials, businesses report that these costs, coupled with limited access to credit, remain barriers to scaling operations.
Technology: A Beacon of Hope
Despite these challenges, the survey underscores the growing reliance on technology to enhance business efficiency. Businesses, particularly in the agriculture and services sectors, are adopting emerging and advanced technologies to improve productivity and offset operational inefficiencies.
The manufacturing sector is also increasingly embracing digital tools to streamline operations. However, outdated systems remain prevalent among some businesses, signaling untapped potential for further technological advancement.
The survey further highlights the positive impact of digitalization in mitigating inefficiencies, with businesses leveraging digital platforms for market access, customer engagement, and supply chain management. This aligns with Ghana’s broader digital transformation agenda, which seeks to position the country as a hub for digital innovation in West Africa.
Strengths in the Business Environment
While challenges persist, respondents rated certain aspects of Ghana’s business environment positively. The availability of telecommunications, power, and labor emerged as the most favorable components. Ghana’s telecommunications infrastructure has seen significant growth in recent years, with improved internet penetration and mobile connectivity fostering digital commerce and innovation.
The labor market, though constrained by skill gaps in some industries, remains a strength due to the availability of a youthful workforce eager to embrace new technologies.
Government Initiatives and Business Resilience
The Ghanaian government has introduced various initiatives aimed at improving the business environment. These include tax incentives for SMEs, infrastructure development projects, and efforts to enhance access to financing through partnerships with development finance institutions. However, the effectiveness of these initiatives has been hampered by macroeconomic challenges, including inflation and exchange rate volatility.
Businesses in Ghana have demonstrated resilience by adapting to these challenges. Many companies are exploring local sourcing of materials to mitigate import costs and are actively seeking partnerships to access financing and technology.
The 2024 UKGCC BECS provides a nuanced picture of Ghana’s business landscape: a mix of significant challenges and promising opportunities. For Ghana to enhance its competitiveness and attract more investors, stakeholders must address the high costs of production, improve regulatory efficiency, and accelerate digital transformation. With focused interventions and sustained efforts, Ghana can leverage its strengths—such as a robust telecommunications network and a dynamic workforce—to overcome its challenges and drive economic growth.
