Ghana: Investing in Ghana
According to UNCTAD's World Investment Report 2023, FDI inflows to Ghana declined by 39% year-on-year in 2022, amounting to USD 1.47 billion. The value of announced greenfield projects remained constant at USD 1.3 billion, while international project finance deals dropped from USD 1.8 billion the previous year to USD 358 million. The largest foreign investment project in Ghana in 2022 was the construction of a railway line in the western region, with a value of USD 3.2 billion. By the end of the same period, the stock of FDI stood at USD 42.49 billion, equivalent to approximately 58.3% of the country’s GDP. Ghana ranks as the third-largest recipient of FDI in West Africa, accounting for roughly 20% of the region’s stock, and the tenth recipient in Africa. Investments are primarily concentrated in oil and gas facilities, gold mining, agriculture (particularly cocoa), and export fruits. Ghana's top investing economies include South Africa, the Netherlands, France, Mauritius, and China, according to the IMF. In the first half of 2023, Ghana experienced a 16% decline in FDI projects, with 72 projects registered compared to 86 in the same period the previous year. However, the total estimated investment value increased by 35% to USD 274 million from USD 203 million, with the FDI component rising by 22% to USD 229 million.
Ghanaian authorities have been making efforts to simplify complex and lengthy procedures for foreign investors while offering tax incentives. Ghana boasts democratic governance, a large and cost-effective labor force, abundant natural resources, and stable institutions, making it one of the most open economies to foreign equity ownership in the region. Nonetheless, challenges such as bureaucracy, corruption, weak productivity, difficulty in obtaining financing services, underdeveloped transport infrastructure, ambiguous property laws, frequent power and water cuts, and an unskilled labor force hinder FDI. Major ongoing reforms include the dematerialization of tax, legal, and business registration processes. In 2022, Ghana was removed from the EU grey list of high-risk money laundering countries. While Ghana's major sectors are generally open to foreign capital, there are specific minimum capital requirements for foreign investments. Certain sectors are excluded from foreign investment, including petty trading, taxi and car rental services with fewer than 25 vehicles, lotteries (excluding soccer pools), beauty salons, printing of recharge scratch cards, production of exercise books and stationery, retail of pharmaceutical products, and production, supply, and retail of sealed pouch drinking water. Additionally, foreign investors have limited access in sectors such as telecommunications, banking, fishing, mining, petroleum, and real estate. Ghana ranks 99th among the 132 economies on the Global Innovation Index 2023 and 104th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 1,333 | 2,414 | 1,473 |
FDI Stock (million USD) | 40,829 | 41,021 | 42,493 |
Number of Greenfield Investments* | 34 | 29 | 39 |
Value of Greenfield Investments (million USD) | 1,375 | 1,335 | 1,333 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Ghana | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 7.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Strong points of investing in Ghana include:
Challenges for investors in Ghana include:
A reduced corporate tax rate of 8% is available for companies engaged in “non-traditional exports,” and a 20% rate applies to financial institutions on income from loans granted to farming enterprises and leasing companies.
Free Trade Zone (FTZ) companies have a 10-year exemption period after which they pay corporate tax at 15% on export sales.
A rebate is granted to manufacturing companies located outside Accra and Tema. In regional capitals (other than Accra and Tema), the rebate is 75% of the standard corporate tax rate of 25%, and in all other places, it is 50% of the standard tax rate.
Tax holidays are granted, from the beginning of the operations, in the following cases:
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Latest Update: April 2024