GHANA

Ranya ShamsKenza ChaterJana Huwait

Razan Kattan Alanoud Al-Mutlak

Introduction

Socio-Economic Analysis

• Major cities population: Accra and Kumasi.

• Population density: 115 people\km2

• Population: 51% females. 49% males.

• Population growth rate: 2.19%• Median age: 20.7 years. • Official language: English• Religions: Christian, Islam

• Fertility rate: 4.12 children\woman

• Birth rate: 31.7/1000 population• Death rate: 7.53/1000 population • Child labor (ages 5-14): 8.2%• High degree of risk of infectious

diseases.

• Increase of skilled labor’s migration due to unemployment.

• Growth of domestic educated labor force.

• Enrollment in graduate and postgraduate programs.

• Hospitals and other institutions of higher learning are struggling hard to retain staff.

Economic Analysis

Economic Freedom• Ghana’s economic freedom score is 64.2. • Its overall score is 2.9 points better than

last year, reflecting notable improvements in the control of government spending, freedom from corruption, and business freedom.

• Ghana is ranked 5th out of 46 countries in the Sub-Saharan Africa region, and its overall score has risen above the world average.

GDPGross domestic product (GDP) growth decelerated from 14.4% in 2011 to 7.1% in 2012. The economic growth peak in 2011 was due to the start-up of oil production in the last quarter of 2010. The growth performance in 2012 was achieved despite lower cocoa and oil production.

GNI per capita (current LCU)• The value for GNI per capita (current LCU) in

Ghana was 2,297.75 as of 2011. As the graph below shows, over the past 51 years this indicator reached a maximum value of 2,297.75 in 2011 and a minimum value of 0.01 in 1960.

• Source: World Bank national accounts data, and OECD National Accounts data files.

• Ghana has been classified as a low middle-income country by the World Bank since 2010. Ghana continues to be challenged by slow progress on reduction of under-5 mortality, improvement of maternal health and environmental sustainability.

Income Distribution

• The World Bank provides data for Ghana from 1992 to 2014.The minimum was in 2006 of 3.6 % and a maximum of 11% in 2014.

Unemployment Rate

1992 2000 2006 201402468

1012

Unemployment Rate

Unemployment Rate

Financial Analysis

Financial Situation Ghana’s currency : cedi GH₵;

code :GHS

Exchange RateCurrency Pairs Code Buying Selling

U.S Dollar USDGHS 2.7937 2.7963

Pound Sterling GBPGHS 4.7127 4.7182

Swiss Franc CHFGHS 3.1772 3.1798

Australian Dollar AUDGHS 2.5873 2.5917

Canadian Dollar CADGHS 2.5477 2.5501

Danish Kroner DKKGHS 0.5189 0.5194

Japanese Yen JPYGHS 0.0273 0.0274

New Zealand Dollar NZDGHS 2.4162 2.4204

Norwegian Kroner NOKGHS 0.4702 0.4705

Swedish Kroner SEKGHS 0.4289 0.4292

S/African Rand ZARGHS 0.2670 0.2672

Euro EURGHS 3.8737 3.8772

Chinese Reminbi CNYGHS 0.4464 0.4467

It can be attractive for a foreigner to invest due the cheaper value of currency that would decrease costs.

Interest rate

• Ghana’s interest rate is currently 18%. ( somehow its high compared to other countries).

• Effect of the raise of interest rate on the businesses.

Ghana's inflation rate

• Ghana’s inflation rate reached 14.5 during march 2014.

• It’s the highest inflation rate since February 2014 .• It caused an increase in the prices of fuel , kerosene ,

transportation and dairy cost , which will affect the businesses by …

GHANA CORPORATE TAX RATE

Ghana Taxes RateTaxes are paid on goods and services( indirect)

and income tax (direct )

Current corporate tax is 22.9%

Ghana corporate tax rate VS other countries ( US)(40%). Effects

Taxes paid out of capital.The more money they pay in taxes, the less money they have to hire more employees and grow the business.Taxes also cut into profits and the company’s stock value.

Ghana’s International Debt

International DebtWhat is an international debt ?

• The External Debt (Total) of Ghana is 12.7 ( billions of $) with a global rank of 94.

• “External debt sustainability analysis" in an attempt to determine the suitability of a country for investment . This analysis takes into account monetary and fiscal policies; micro- and macroeconomic situations; and various scenarios that consider possible instabilities and adverse events.

• Ghana's external debt have lead into economic growth in the

past several years.

Balance of Payment

Balance of Payment • Deficit in current account: the country's total

imports of goods, services and transfers is greater than the total export of goods, services and transfers indicating that, Ghana is a net debtor to the rest of the world.

• Total exports declined, non-oil imports went down while oil imports increased.

• The net inflows into the capital and financial account improved.

• These developments resulted in an improved balance of payments deficit of US$136.3 million in the first quarter of 2013, compared with a deficit of US$1.3 billion in the same period of 2012.

Balance of Payment• Ghana cedi cumulatively depreciated by 2.3

percent against the US dollar. During the first quarter of 2013, however, the real exchange rate appreciated by 5.9 percent.

• On the external front, the trade deficit has widened further on the back of a significant deterioration in terms of trade. This was on account of low international commodity prices which have fed through to lower exports receipts, despite imports remaining broadly flat.

• The combination of these factors have resulted in heightened exchange rate pressures in the foreign exchange market, although at a measured pace, relative to 2012.

Competitive Analysis

• Ghana is the world’s third largest producer and the second largest exporter of cocoa beans.

• The recent success in sustaining a continuous path of economic growth and poverty reduction in Ghana has been partly ascribed to the recovery of the cocoa sector.

Cocoa

• U.S.-Ghana Trade Facts: Ghana is currently our 91st largest goods trading partner during 2013.

• Exports: Ghana was the United States' 75th largest goods export market in 2013.

• The top export categories in 2013 were: Vehicles Machinery, Mineral Fuel (oil), Meat and Cereals (rice).

• Imports: Ghana was the United States' 100th largest supplier of goods imports in 2013.

• The five largest import categories in 2013 were: Cocoa, Mineral Fuel, Wood, Rubber, and Vegetables.

• Ghana is known as the gold coast due to the huge amount of gold found there.

• Ghana is the 2nd largest gold producer in Africa and the 8th largest globally. the country earned nearly $1.5 billion through export of gold.

Gold

• Ghana is one of the fastest developing nations for Business Process Outsourcing today. 

• Ranking 13th in the top outsourcing countries in 2010.

• Reasons why some countries are attracted to Ghana: stable democratic environment, low-cost labor, and zero taxes.

Outsourcing

Socio-Cultural Analysis

Business Etiquette and ProtocolGreeting and Meeting:

Handshakes

• To rush a greeting is extremely rude.• Eye contact.• Titles are important.

Male over 30 ( Pah-Pah)Women over 30 ( Mah-mee) people over 50 (Nah-nah )

• Business cards

• Initial meetings

Gifts :• Gifts should not be expensive

• If invited to dinner at a Ghanaian’s home

Ghana National Cloth – Kente

Kente Samples and Patterns

Colors and MeaningYellow: Holy and Precious

Pink: Calmness and Sweetness

Red: Strong political and spiritual feelings.

Blue: Peace, harmony, good fortune, and love.

Green: Growth and good health

White: Purity and healing.

Black: Strong spiritual energy.

Tribes of Ghana ( Ethnic groups )1- Adangbe2- Akan ( Ashanti)3- Akwamu4- Dagomba5- Ewe6- Frafra7- Ga8- Guan

Religions of Ghana

Ghanian Languages

Traditional Food and Drinks

Fufu Kenkey

Money and paying for things- Friendly bargaining

- Never get angry

- Price are 30% to 50% higher.

- Bargaining price 50% lower

Legal

• Same obligations.• A foreign company must register

with the Registrar General within one month.

• Doing business through a branch or a subsidiary company.

• Mandatory payment of tax from the income.

• Certain types of enterprises are operating in Ghana.

• The foreign investment with a Ghanaian partner is at least USD 10,000 or USD 50,000 if it’s a wholly owned.

• A trading enterprise for only buying and selling, the foreign investment must be at least USD 300,000

• At least ten Ghanaians a business must employ.

• No minimum capital requirement applies.

• Minimum standards for wages and working conditions. It’s fixed at 3.73 Cedis per day. 

• The average annual salary is at 397 Cedis.

• By law, the maximum workweek is 45 hours.

• A business visa is required to work in Ghana, and permits to stay for visits of up to three months.

Legal Quotas and Barriers • Government will make selective

commitments for liberalization and ensuring legal provisions and protect consumers from unfair practices.

• Incentives to exports and increase prices of imports inventories.

• Technical Barriers. • The region remains weakly integrated,

with continuing tariff barriers (for example where restrictive rules of origin cannot be met) and substantial non-tariff barriers

Political

• Unitary state

• Presidential system

• Constitutional republic

Dr. John Dramani Mahama, President

Political Situation• Ghana ranked fifth in political stabilityChanges of this nature will affect firms

significantly and may increase their costs. However, additional rights could also result in improved motivation and this may help compensate for higher

costs. Businesses will look carefully at all political changes to assess the impact that they will have on them and their

competitors.

National issues• Healthcare & Health

Infrastructure

National Issues • Extreme poverty and hunger, as well as

education

National IssuesGhana’s national issues will somehow discourage foreign investors due to :

Lack of skilled employees.Hard to attract expatiates employees

A disagreeable work atmosphere

But it can have an advantage of :Low wages and salaries .

Recommendations and Conclusion