Although Ghana’s economy has gone through some rough patches, successive governments have in recent years introduced new reforms. These are aimed at improving the macroeconomic and business environment to attract Foreign Direct Investment (FDI). The reforms have also laid the foundation for further diversification of the economy.
They have created new investment opportunities in a number of sectors, but the business environment in Ghana continues to be faced by many challenges. These include deficient infrastructure, high cost of power, foreign exchange shortages, high inflation, currency volatility, bureaucratic delays, corruption, high capital cost, red-tape, high housing cost, as well as excessive and unpredictable regulations.
In a nutshell, Ghana is open for business – but the potential investor has to be aware of some of the dos and don’ts of doing business with Ghanaian companies in order to get prepared. I therefore dedicate this article to foreign companies looking to locate or do business in Ghana.
Be patients and persist
The journey is often very challenging when doing business in Ghana, and it takes a lot of patience, persistence and perseverance to succeed in this market – i.e. few companies/individuals reply to business emails, and it is therefore recommended you follow-up with phone calls; and where provided, it is often easier to get through to business contacts on their mobile phones.
Unless you have passion for what you plan to do in Ghana and finding the right customers/clients/partners, it can be frustrating running a successful business here. Your goal and business dreams should be so big and exciting that, no matter what, you keep grinding. Don’t stop until you have achieved what you are aiming for in Ghana.
Respect the laws of Ghana
Businessmen may take the law for granted and never consult a lawyer or refer to the law while doing business. In Ghana, however, before a Ghanaian does business with you, they will look for a clear evidence of the product or a good review of the service you say you can provide before engaging with you. Please therefore have sufficient business cards, product samples and any other company materials to hand over at meetings.
Be aware; Internet scams are on the ascendancy
It is very common knowledge that the spread of cyber fraud in Africa (including Ghana) is on the increase. Ghana is currently ranked 7th in cyber fraud, known locally as ‘Sakawa’, out of 10 countries identified in the world – which is very alarming. Do not get attracted to offers that come into your inbox out of the blue with juicy business offers – it just does not work like that.
You must do due diligence on companies that come up with proposals that are too sweet to be true. Be sure to contact your country Embassy, High Commission or Chamber of Commerce & Industry to double-check potential partners/customers before you proceed to engage with them.
Cultural Etiquette in Ghana
Ghanaians tend to be an easy-going people; however, like most other countries in the world, Ghanaian have their own social customs. It is therefore important to know some of the common practices used in Ghana. Business appointments should be arranged in advance and punctuality is appreciated – although this may not be the same with local companies.
Business visitors should try to remember not to greet, eat, direct or give things out with the left hand. There is greater degree of physical contact during social interaction between people, and that when engaged in conversation people tend to stand relatively close to each other.
It should be noted that it is considered rude to point, or to summon a person with the palm up; a sharp hiss will attract attention. It is customary to shake (right) hands when meeting and taking leave and when greeting a group, to start from the right and work round to the left – no matter the hierarchical structure of the welcoming group. Ensure you are familiar with other social customs.
Collaboration & Partnerships
When you enter into Joint Ventures (JVs), be sure you know who the partner is with some background checks. It is best to avoid ‘politically generated’ business/partners, as officials will always welcome you with high-sounding promises; but be aware there is a gulf between rhetoric and action. There are many reasons why some have not done so well in Ghana. These include not conducting proper due diligence before entering the market, selecting the wrong acquisition target, inappropriate market strategies, choosing the wrong partner, and mismanaging stakeholder relations etc.
Insist on written agreements and discuss your business partnership with your lawyer
The only way you can cover your back is to have a written agreements and offers for all your business relationships. Your written contract is the only protection you have by limiting your damages should a contract be breached, or have been negligent. The court of the land will enforce the terms of a written agreement even if one of the parties insists he never read it and he agreed to something totally different. Therefore get it in writing. People remember things differently, others don’t remember and some will lie. So, ask your clients/partners to sign some simple paperwork.
To ensure you have safeguards in all legal agreements, speak with a local lawyer that understands your business quickly. If you are unsure or don’t understand any legal terms about any contract or agreement, seek confirmation from your lawyer who will help review or draft the contract you will need for customers, clients and suppliers etc.
Most lawyers agree that while nobody likes to pay attorneys’ fees, or to deal with lawyers, it is better to pay legal fees than compromise on business deals that will cost you later. Lawyers may be expensive, but they are more experienced or expert in the area of law that relates to your business sector and the local laws.
Have a long-term vision and incorporate CSR into your business strategy
These are mistakes that firms can avoid or mitigate. But there are also factors beyond a firm’s control that can have a negative impact on business, such as not having CSR incorporated in your business strategy. As far as you are interested in building long-term business in Ghana, you must look at how you will contribute to community projects.
An area you could consider is to align and integrate your core business with social values and environmental stewardship. For me, companies that are not able to respond by creating an internal business case for implementation of the 17 Sustainable Development Goals (SDGs) value-strategy into their organisations operations will fail to grow.
Get frustrated by delays
Most foreign companies get frustrated over undue delays with business processes in Ghana, and this has affected them in so many ways because of necessary bureaucratic processes. Having a trusted local partner is very beneficial, as they can do the groundwork on your behalf and chase up top management – as dealing with secretaries and frontline staff can be very frustrating.
Nowadays, it is increasingly best to deal with the top man/woman to get things done. It is also important to follow-up any business leads generated from your business visit or conversation without delay, and keep the company/individual informed on the progress on a regular basis. A prompt response is a must, even to inform them of the receipt of information.
Believe everything you hear
To overcome any business anxiety, it’s important that you don’t just listen and go along with everything you hear. You have to use your own judgement to see things more rationally, and overcome social anxiety disorders effectively.
People can promise you heaven on earth and claim to have political and business connections, but do not rely on any political patronage in order to push your business in Ghana. Follow the general process and you will be sure to succeed.
Ready to GO!
Remember, everything is possible if you make that first step. I have come to realise nothing is easy in this world, but when you push you can succeed. Western business logic does not apply here, and so you must persist and things will definitely come your way eventually if you work hard at it.
Hopefully, these dos and don’ts will help you on your way to making successful steps in establishing your business in Ghana. Do get professional advice on best routes to market for your products and services in Ghana. Chances are that you may land a good deal that can turn your International Export plans around.
Getting professional help to advise you on entering the Ghanaian market
You may contact us at [email protected] to receive more guidance and advice on how to bring your products or services to Ghana. Global Trade Consult representatives will be happy to support you throughout your export journey abroad.
About Global Trade Consult:
Global Trade Consult is a Ghanaian-based private consultancy firm supporting local and foreign organisations with business interests in Ghana. We help companies understand, access, and manage business opportunities by helping companies’ trade and invest in Ghana. You may contact us on:
Tel: +233(0)55 6210 224
Email: [email protected]