8THINGS TO REMEMBER ABOUT GHANAIAN ECONOMY.

1. A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture, usually in the form of a partnership or a limited company. However, under the Ghana Investment Promotion Centre Act, 1994 (Act 478), a minimum equity capital ofUS$10,000 is required from any foreign investor who intends to enter into a joint venture partnership with a Ghanaian in any area of economic activity, except trading. In trading, the minimum equity capital requirement is US$300,000.

2. Foreign investors are permitted 100-per-cent ownership of an enterprise provided the investor satisfies section 19 (2b) of the GIPC Act, 1994 (Act 478). Wholly foreign-owned enterprises must have a minimum paid up capital, the equivalent of US$50,000 in all areas of economic activity except import trading, where the minimum equity capital requirement is US$300,000. In the cases of export trading and liaison (external) offices, there is no minimum foreign equity requirement.

3. Regulations require that you have a joint-venture partner especially in the Ghana’s oil and gas sector where the Local Content Law necessitates a joint venture partnership. Carefully select the right local partner/target by understanding the equity story, the shareholding structure in what may be a family business, the M&A experience of the shareholders, management capability and integrity are critical for would-be global acquirers.

4. Your local partner should be able to build on local understanding, establish relationships and networks assist in managing risks and help execute the entry strategy.

5. Also make sure everyone involved is very clear on the joint venture’s goals and objectives, and has a good understanding of how those goals are to be accomplished.

6. Conversely, although entering the Ghanaian market via an acquisition can be expensive and time consuming, it can provide immediate access to existing distribution channels, networks, and the opportunity to gain deep local market insights that companies can scale up to address other markets.

7. Prepare for enough initial cash flow – Because of high interest rates, borrowing money from banks in Ghana is very expensive. It is therefore critical that foreign investors have ample cash flow to keep their businesses going in the early stages. When starting a business in Ghana, it is important to come with a sufficient cash flow, because one of the issues in the country is bank interest rates, which are above 20%.

8. Understanding the local market – Companies interested in entering and winning in Ghana need to devise a structured approach to understand and do business with Ghanaian consumers. By focusing on the unique needs, behaviors, and preferences of Ghana’s consumer segments, and by applying an orderly approach to market entry and ongoing success; companies can capture the Ghanaian opportunity on their own terms, and in the process, ensure long-term profitable growth.