The Cost of Doing Business in Ghana: A Tax on Sanity and Development Challenges

The Cost of Doing Business in Ghana: A Tax on Sanity

For too long, the discourse around Ghana’s economic development has overlooked a critical element: the underlying social and operational environment that either fosters or stifles enterprise. These series of articles aim to dissect the foundational dysfunctions in how our society relates to work, enterprise, and trust, arguing that unless these are addressed, Ghana’s economy will remain a low-altitude craft, forever circling the runway.

My recent interactions with some of Ghana’s most serious domestic firms—Niche Cocoa, Kasapreko, and Zoomlion among them—revealed a paradoxical reality. While inspiring due to the genuine efforts of these companies to manufacture, export, and hire at scale, the experience was equally distressing. Each operates within a system that seems to treat productivity as an afterthought. Running a business in Ghana is not merely challenging; it’s an endurance test.

Each visit was a study in ingenuity under siege. Executives meticulously detailed elaborate internal systems—cameras, GPS trackers, multiple layers of supervision—all designed not to enhance productivity, but primarily to prevent theft, idleness, and waste. As one plant manager starkly put it,

In Ghana, you build a company and then you build a fortress around it.

These hidden costs of pervasive distrust would bankrupt a firm in more developed economies. Yet, as if that weren’t enough, every business must also navigate an endless parade of inspectors and auditors from a multitude of regulatory bodies. It’s an exhausting ecosystem where every official with a badge seems to perceive their role as extracting value rather than enabling it.

The Shadow Shareholder: GRA and the Extractive State

Ask any Ghanaian entrepreneur to identify their most persistent stakeholder, and the answer is consistently the Ghana Revenue Authority (GRA). The GRA often behaves less like a regulator facilitating compliance and more like a shadow shareholder—entitled to its cut, frequently indifferent to the firm’s long-term survival.

The agency’s insistence on using physical VAT receipt books, which are printed and stamped akin to lorry-park tickets, is a small but profoundly telling absurdity. It signals a state deeply distrustful of its own citizens, to the extent that it resists automation, fearing any progress that might occur unsupervised. When you add the Environmental Protection Agency (EPA), the Minerals Commission, the Ghana Standards Authority (GSA), and the trade unions to this mix, what emerges is a regulatory gauntlet that functions more like a neighborhood protection syndicate than a public service. Every inspection, it seems, becomes a transaction, and every transaction, a tax on sanity.

Banking Without Credit

If the regulatory environment doesn’t stifle you, the banking sector often starves you. In Ghana, the concept of “credit” for small and medium-sized enterprises (SMEs) often feels mythological. Banks frequently demand collateral worth 120% of the loan amount, focusing not on the strength of a business idea or a healthy balance sheet, but on the safety of an existing asset like a house title.

This approach isn’t prudent risk management; it’s paralysis. While the central bank might label it prudence, in practice, it embodies a policy of institutionalized distrust—a system that primarily recycles wealth among the already wealthy. The direct consequence is a domestic private sector permanently stuck in adolescence, too constrained to compete effectively and too indebted to expand meaningfully.

A Society of Extractors?

This entire situation reflects a painful truth: successive Ghanaian governments have consistently failed to grasp that nation-building isn’t primarily about their manifestos, but about nurturing the scaffolding of society itself. Our politics has devolved into a pageant of beautifully typeset campaign poetry, while the underlying architecture of economic life remains brittle.

The Ghanaian state, it appears, behaves like a farmer obsessed with milking the cow but unwilling to feed it. Employees, in turn, often treat companies as mere cash machines rather than communities of shared purpose. The result is a society where extraction—from government to employee to regulator—is widely felt to be a right, and few feel genuinely compelled to create value. It is an economy structured around the distribution of spoils, not the production of value.

When Nations Get Serious: Intervening in the Parking Lot

Other countries have faced similar chaos and transcended it, not through moralizing, but by strategically intervening in the seemingly mundane aspects of everyday behavior. In 1966, South Korean President Park Chung-hee famously issued a scathing letter to his citizens, admonishing them for laziness, sloppiness, and lack of discipline. He demanded cleanliness, punctuality, and a sense of national dignity, supporting these directives with an industrial policy that explicitly rewarded productivity.

Lee Kuan Yew implemented similar strategies in Singapore, legislating civic habits down to the chewing of gum, and rigorously enforcing public cleanliness and linguistic discipline. To outsiders, these measures might have appeared petty; to Singaporeans, they became cultural software—a system that embedded order and trust as habitual behaviors.

Malaysia’s Mahathir Mohamad, recognizing that ethnic division was an impediment to cooperation, controversially banned political leaders from publicly debating sensitive racial issues. This was an uncomfortable constraint, but it successfully created the stability necessary for investment and collaborative growth. Even post-communist Poland understood that economic freedom would be unsustainable without social discipline. These were governments that cared enough about the values and disposition of their citizens toward work that they were willing to intervene to shape the environment so that entrepreneurship could thrive. In those places, behavior became an economic non-negotiable.

Ghana’s government, however, still largely acts as though public behavior is none of its business. It prioritizes ribbon cuttings and catchy slogans—such as “Ghana Beyond Aid” and “One District, One Factory”—over the painstaking, fundamental work of rewiring the national operating system. Yet, government can and must change the software behind our collective mindset and behavior. It can digitize processes to eliminate arbitrary inspections. It can professionalize the civil service, ensuring that merit is genuinely rewarded. It can make corruption genuinely risky and competence truly rewarding. It can model order, punctuality, and accountability in public life until those habits cascade down to the factory floor. Mindset change isn’t merely about motivational slogans; it’s about making trust cheaper than suspicion.

Changing Mindset: Institutions Before Attitudes

It’s a common refrain: “We need attitudinal change.” But attitude is a product of incentives, not just sermons. South Korea didn’t become disciplined because of speeches; it became disciplined because productivity was rewarded, and indolence was penalized. Japan’s post-war transformation was driven by kaizen—the philosophy of continuous improvement—which reshaped workplaces by aligning self-worth with craftsmanship. If Ghana desires discipline, it must construct a system where the disciplined succeed. If it seeks honesty, it must ensure honesty pays. If it aims for innovation, it must protect innovators from political predators. Patriotism holds little meaning when the state consistently opens the dam while simultaneously asking citizens to row upstream.

Ghanaians generally do not trust politicians, and the feeling, unfortunately, appears mutual. The state suspects citizens of evasion; citizens suspect the state of theft. This pervasive, mutual cynicism paralyzes cooperation. When the government urges, “support local business,” the automatic retort from many is, “they just want to chop.” The only effective antidote is radical transparency. Publish contracts, beneficiaries, and outcomes. If the government subsidizes the sale of a state asset like AT Ghana to a local consortium, disclose the terms, the targets, and the sunset clauses. Let citizens see that policy can, in fact, serve the collective interest.

Reimagine Success: From Rent-Seeking to Problem-Solving

In Ghana, “success” is too often defined by proximity to power. We lionize the contract winner, not the genuine problem-solver or value-creator. This paradigm must shift. We need to celebrate those who build—in agriculture, technology, and manufacturing—not merely those who harvest the state’s resources. The real miracle economies were not born in prayer camps; they were built in policy labs, on factory floors, and in boardrooms that held competence as sacred.

Trust is the Infrastructure

Ultimately, mindset mirrors institutions. If Ghana genuinely wishes to change its mindset, it must first rectify the incentives that govern behavior. Trust is the invisible infrastructure of development—the fundamental platform upon which credit, contracts, and collaboration securely rest. Japan, Korea, Singapore, Malaysia, and Poland all built this trust by confronting uncomfortable truths about their societies and actively intervening to reorder behavior. Ghana must now find the courage to do the same. Because the true work of development isn’t found in manifestos or slogans—it’s in feeding the cow you expect to milk, and in diligently building a society where creation, not extraction, becomes the national instinct.

~ Hene Aku Kwapong, CDD Ghana Fellow, Ecobank Ghana board member, & Founder, NBOSI www.nbosi.org, Personal website: theblueprint.page.