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Doing business in Ghana: A golden opportunity

Doing business in Ghana: A golden opportunityGold is the colour of opportunity, and for exporters there is no better market than Ghana. If you are looking for a low-competition market with the growth potential of Asia, West Africa and its business beacon Ghana is the way forward.

Ask the average Australian to locate Ghana on a map of Africa and most people would need to guess. But this little-known country could be the key to our future prosperity and a chance to ride a second resources boom if we play our cards right, says Greg Hull, Austrade’s senior trade commissioner in Africa. “An existing strong mineral resources sector, a strong cocoa industry and significant petroleum resource discoveries, among other economic strengths, should significantly underpin Ghana’s economy into the future,” he says. “Political stability, improved governance and a welcoming investment climate all make Ghana a very prospective market. Ghana has a dynamic port, Tema, and wide import needs.”

New exporters
Situated in western Africa facing the Gulf of Guinea, Ghana is the perfect gateway for exporters looking to expand north and east. New exporters will be relieved to know that Austrade has just opened an office based within the Australian High Commission in the capital, Accra, to provide on-the-ground support.

“This [positioning] should, over time, identify business opportunities and pass them to Australian companies,” notes Hull. “The Ghanaian Government has an attractive investment regime and very proactive Investment Promotion Centre (GIPC) that can help newcomers through the prerequisite requirements relevant to their industry. Australian companies also need to be aware of the many multilateral aid and loan programs that operate projects in Ghana.”

The business environment in Ghana is very supportive of foreigners and, says Ghanaian Dr Kwame Asumadu, “It’s one of the most stable countries in Africa to do business. Its law and business practices are based on Great Britain’s laws. To a large extent, the business culture in Ghana is similar to the business culture in Australia.”

Asumadu is the secretary of the Australia Africa Business Council’s Victorian chapter and managing director of business service Asumadu & Associates. In addition to the resources sector, he mentions several service opportunities in recruitment, financial services, tertiary and vocational education and hospitality.
One thing businesses new to Ghana should note is that it may take a while to develop connections there. “Relationships need to be nurtured and built up over time,” says Hull. “However, Australians are well respected and viewed favourably by Ghanaians: there is no colonial baggage.”

Existing exporters
Beyond the mines, infrastructure is also an area for Australian businesses to examine. “The country is now looking to develop its infrastructure so that it can be competitive internationally and attract investment,” says Asumadu. “Opportunities exist in residential building and construction, infrastructure development, roads, railway systems, transportation. In the hospitality area there’s huge opportunity to develop hotels and support services. It’s an economy at the take-off point and it is ripe for the right investment.”

And it’s not just physical infrastructure. Business infrastructure—banking, insurance, recruitment and ICT—is also required. “All these are emerging sectors,” explains Asumadu. “In the past 16 years the country has become stable politically and business is now expanding.”

For existing exporters that are keen to do more in Ghana, setting up operations there has many advantages. “There’s a free trade area for foreign companies that provides a whole range of business incentives and support services, tax holidays and the easy availability of land,” says Asumadu. “Australia can also take advantage of export arrangements, for example Ghana can export a range of goods to the European market tariff-free, using Ghanaian counterparts.”

Advanced exporters
Influential exporters could be a big help to newcomers considering Ghanaians like to deal with familiar faces. Hull says the Australian government actively encourages networking. “The High Commissioner, Billy Williams, has an excellent range of contacts within the Australian business community and gets them together when time and opportunity permits. Although few in number, the Australian mining community across West Africa know each other and pass reference work wherever possible.”

Asumadu mentions that Ghana’s role in the Economic Community of West African States (ECOWAS) could mean even bigger opportunities throughout the rest of West Africa. “Ghana is the centre of ECOWAS, an emerging common market, so that is a huge advantage,” he says. “Companies that want to do business in West Africa are locating their headquarters in Ghana.”

One of the barriers entering Ghana is Australia’s general lack of familiarity with Africa. “Australia still needs to deepen and widen our commercial relationship across Africa,” admits Hull. “Africa is a risky and geographically challenging continent in which to do business. Although stabilising, sovereign risk is never far away. We have few government resources on the ground to help, but can provide a useful commercial perspective, at least before entering such a market.”

Africa has a poor reputation among Australians, agrees Asumadu. “When you think of Africa you think of wars, you think of HIV/AIDS, you think of corruption. But Ghana, in my view, is no different from several of the Asian ‘tigers’ that Australians do business with except that Ghanaian business culture is more similar to the Australian business culture than the Asian countries.”

On a practical level, Ghana’s distance from Australia and a lack of direct flights make it a difficult prospect, especially as the market requires a fairly constant presence. This may mean exporters are forced to employ a local partner or to set up operations there to maintain contact with the market. Time zone is also a consideration in this regard.

“The ability to service the market not easy. For bulk items, transport costs can be a issue,” says Hull. “Best if other markets in Africa are considered at the same time, especially in West Africa, but a base in East Africa or in South Africa is also a good approach.”

As a developing country, Ghana also lacks some of the facilities that may be standard in other markets, Asumadu cautions. “Companies need to be realistic and understand that Ghana is a developing country. There are areas where development may not be to the standard that you’ll find in Australia. Nevertheless, it doesn’t prevent you from getting your business off the ground.”

While the Ghanaian government embraces foreign investments and business dealings, sometimes processing can be slow, he adds. “Systems are not as fully automated as they may be in Australia. It’s a question of critical mass. As demand increases, the government can find the justification to make the investment to automate.”
The future
Because Ghana is more advanced than some of its neighbours, any value Australians can add to Ghanaian resource operations, infrastructure and its business environment can also be carried across the border to other nations. Ghana is also an excellent place to locate headquarters for the West Africa region, particularly as it is one of the few English-speaking countries among a number of French-speaking ones.

As well as being the gateway to West Africa, doing business in Ghana also presents opportunities in Europe and North America through special trading conditions with those regions.

“Don’t go to Ghana expecting to find Australia. Go to Ghana expecting to find opportunities,” advises Asumadu. “Be broad-minded and be prepared to identify risk and manage those risks prudently. Ghana is a developing country and all developing countries have their challenges, but those challenges do not prevent you from taking advantage of huge opportunities.”

And, he adds as a tip, “Ghana is sports mad like Australia—our national sport is soccer. But there is no reason why Australia cannot introduce Australian Rules football into Ghana.”
So who’s game?

Asumadu & Associates: www.aassociates.com.au
Australia Africa Business Council: www.aabc.net.au
Australian High Commission – Ghana: www.ghana.embassy.gov.au
Consulate General of the Republic of Ghana: ghanacg.com.au
Ghana Association of NSW: www.ghanaassociation.org.au
Ghana Association of Victoria: www.ghanav.org.au
Ghana Association of WA: ghanaassocwa.com.au
Ghana Australia Association of Queensland: www.ghanaqld.org.au
Ghana High Commission: www.ghanahighcom.org.au

Ghana Profile
Capital: Accra
Government: Republic. Ghana gained independence from the UK in 1957
Languages: English (official), as well as Twi, Fante, Ga, Ewe, Hausa and Dagbani
Currency: Cedi (GHC), divided into 100 pesewas
Tipping: Discretionary, but 10 percent is expected in restaurants
Visas: Australian citizens need a visa, which they can obtain from the Ghana High Commission in Canberra
Religion: Christian, Muslim and traditional beliefs
Seasons: Southern Ghana: wet in April – June and September – October, dry in November – March and July – August; northern Ghana: wet from April – October
—Source: FCm Travel Solutions

CAPS Australia

Three decades ago, a Western Australian company called CAPS Australia began providing compressed air and power generation equipment to mining operations. After sporadic sales in New Zealand and Papua New Guinea, they got serious about export. “Our first real export job was to Ghana in 1993. We dealt through Australian engineering contracts and the Ghana job was through Minproc [now GRD Minproc] that had a contract for the expansion of the Ashanti goldfields,” relays Greg Baldwin, export manager for CAPS. “Prior to that, no one knew where Ghana was.”

Over the past 15 years, CAPS has developed a relationship with the country beyond their initial introduction. Concentrating on the resources sector in Australia, the company found Ghanaian mining operations suited them. “Ghana’s real focus is in the resources game and that’s where we aligned ourselves and saw the opportunity,” says Baldwin. “Ghana is still a developing country so they need a lot of that experience, technical input and technology.” The exporter is now exploring complementary opportunities in industries like the oil and gas sector.

Baldwin’s advice to businesses looking at Ghana is to enlist the help of government organisations such as Austrade and the Australian High Commission, which both provide introductions. He says to find expat Australians or local partners who can tap into the Ghanaian network. “They won’t do business with you because you have a good product, they want to understand that you’re a good person. Sometimes they will do business on price but a lot of times they want to understand who you are,” he explains. “There’s a fraternity, if you like, that will open doors. If you have a local partner who has connections to people, it’ll get you business outside of what you know.”

Africa will be the next hotspot and Ghana will be an important part of its growth, so now’s the time to prepare for the boom, Baldwin believes. “Use Ghana as your base to launch into West Africa; it’s English-speaking, it’s safe, they’re willing to help and they have educated people. West Africa will grow. In these tough times I think it’s important to explore diversity.”

Baldwin’s Lessons

  • Have a local partner or employ someone in the country. Especially because of the distance and time difference with Australia.
  • Don’t expect things to be like Australia. If you know an expat Australian or someone of a similar culture, speak to them, learn from them. Take advice from people who have experience there.
  • Have contingencies. Things take longer and if you’re not aware of that it can bite you because you have deadlines, cash flow, business targets—allow for things to take longer.
  • Don’t be impatient. People have honest intentions to get things done but there are barriers.
  • There’s a lot of loyalty, and a lot of honour to their word.

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Adeline Teoh

Adeline Teoh

Adeline Teoh is a journalist with more than a decade of publishing experience in the fields of business, education, travel, health, and project management. She has specialised in business since 2003.

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