Opinion Editorial by Adam Afriyie, UK’s Prime Minister’s Trade Envoy to Ghana
I am honoured to represent the Government of the United Kingdom of Britain and Northern Ireland at the inauguration of President-elect Nana Akufo-Addo tomorrow. A month ago, Ghana conducted extremely successful elections that will see a third transition of power, following President Mahama’s statesmanlike concession.
The elections cemented Ghana’s reputation as an exemplary African democracy. Now, though, is the time for the incoming administration to demonstrate its commitment that it will be the most business-friendly economy in Africa.
I was appointed as the UK Prime Minister’s Trade Envoy to Ghana a year ago. My father was a Ghanaian and it’s a great privilege for me to help to forge links between our two countries. My role as a UK Trade Envoy is to promote UK trade expertise and capability.
But I also recognise that for UK companies to succeed in Ghana, the domestic private sector needs to be strong, vibrant and dynamic. Both are central elements of the UK’s partnership with Ghana. Businesses bring vital investment, create jobs and contribute to an increasing tax base, with which the government of Ghana can better deliver essential public services.
So, making progress on trade liberalisation, and creating and enabling a predictable environment for both Ghanaian and international companies to flourish are key to increasing Ghana's competitiveness, potential for growth and employment creation capabilities. I am therefore excited by the incoming administration’s early commitments in these areas based on earlier manifesto commitments.
The UK is already a key partner in advancing economic development in Ghana. Through our ‘prosperity agenda’, we support economic and business reform to drive growth in Ghana, while seeking enhanced opportunities for the UK to do business here.
Globally, UK expertise covers diverse areas including architecture, digital technologies, professional services, academia, healthcare, renewable energy, oil and gas, and mining supply chains. Domestic Ghanaian businesses who partner with UK companies stand to benefit from skills transfers, economies of scale and access to innovative technologies.
When I speak to UK firms considering doing business with Africa about what matters most in their decision-making, they often say the quality of the enabling environment. While investment incentives are welcomed, they are not critical, and subsidies are often associated with projects that were unlikely to be economically viable in the first place.
The type of improvements that really count for UK firms include effectively countering corruption; the transparency of investment and tax policies; the consistency of legislation, regulatory approach and fiscal policies; active promotion of the country to potential foreign investors, including helping companies acquire the human capital they need to grow; and an efficient government apparatus staffed by competent and valued individuals. Plus of course, good macro-economic management that should help drive down inflation and interest rates both of which in Ghana are very high in global terms.
Taken together, all these factors help to determine the cost and risk involved in doing business in a country and can affect the opportunities that firms then have to expand. Handled poorly, they can also represent severe constraints to both domestic small and medium-size enterprises and foreign direct investors. For UK companies looking to invest in Ghana, issues around the investment climate make them think twice, particularly if there are other markets in the region that they assess to be easier to enter and operate in.
To remain competitive, Ghana needs to return to a pro-business policy through efforts to reduce the time and costs of doing business. I know that this is a central concern for the President-elect who is conscious that Ghana’s peers in Sub-Saharan Africa are reforming faster and going further.
Kenya, for example, improved its Doing Business ranking from 113 to 92 in the last year alone. Ghana faces competition from other countries, including in its own region, that have cottoned on to the importance of institutional reforms and cutting red tape - initiatives that allow businesses to thrive, create jobs and pay taxes.
As the new government takes office I hope that, with UK support, it will focus on building the economic policy environment needed for business to flourish. A lack of prioritisation or predictability in that environment combined with burdensome regulations reduces private investor confidence. And the impact of last minute changes in regulation, such as tax increments or investment registration fees introduced by Government agencies, can be confusing and costly for business.
So we hope that we can help further strengthen the policy dialogue between the private sector and Government – enabling a coordinated public-private effort to build the vision for reform, demand improvement and monitor implementation. Increased private sector participation and the deregulation of state-owned enterprises in key sectors also offer a real opportunity to improve efficiency and competition in essential services.
It would be great to see Ghana rediscover its reforming zeal. In my role as Trade Envoy to Ghana, I am committed to regularly visiting Ghana in 2017, leading trade delegations, supporting UK businesses to win contracts through transparent and competitive tender processes with both public and private sector businesses in Ghana, networking to help businesses make new contacts, and promoting reforms so that businesses can invest and grow, backed by the British High Commission and the still new UK-Ghana Chamber of Commerce. By doing so, I know that the UK’s partnership with Ghana will go from strength to strength. And I am sure that by working together we can make prosperity a reality for all Ghanaians.
About the author
Adam Afriyie, MP, is the UK’s Prime Minister’s Trade Envoy to Ghana and Conservative Party Member of Parliament for the Windsor constituency