Doing business in Ghana has improved to the point where Ghana leads in West Africa as the place where it is easier for businesses to obtain credit, according to the International Finance Corporation (IFC) and the World Bank.
In the annual report of the Bretton Woods institutions ‘Doing Business 2011’, Ghana is said to have established Africa’s newest centralized Collateral Registry and improved credit information and legal rights through granting an operating license to a private credit bureau.
According to the report titled ‘Doing Business 2011: Making a Difference for Entrepreneurs’, which is the eighth in the series, Ghana led the world in making it easier for businesses to obtain credit.
The report which benchmarks the regulations that enhance business activity and those that constrain it, presents qualitative indicators on business regulation and the protection of property rights for 183 economies from Afghanistan to Zimbabwe. The data are current as of June 2010.
In the sub-region, Ghana remains overall the easiest place to do business and ranks tops in two other indicators Registering Property and Paying Taxes. Sierra Leone is the easiest place to Start a Business and provides the best Protection for Investors; Burkina Faso provides simplified regulations for getting a Construction Permit, Cape Verde tops in Trading Across Borders and Enforcing Contracts while neighbouring Cote d Ivoire makes it easiest in legally Closing a Business.
The report indicates that Ghana has implemented reforms in Getting Credit, one of the nine indicators of the report and has maintained its overall ranking as the easiest place to do business in West Africa.
It added that the IFC working with the Swiss State Secretariat for Economic Affairs (SECO) has provided advisory support in improving Secured Transactions in Ghana. However, there are clearly opportunities especially in deepening the products and scope of the financial markets to ensure that the legal and regulatory framework established by the Borrowers and Lenders Act; the credit reference bureau and the Collateral Registry actually translates into affordable long term credit for firms, especially the large SME market said Mary Jean Moyo, IFC Country Manager for Ghana, who was quoted in the report.
Interest rates in Ghana remain high and there are other areas such as infrastructure and the provision of reliable and affordable energy which while not measured by the Doing Business report has a direct impact on the overall investment climate and thus the ability of Ghana to develop a true competitive edge in the region and globally, the report said.
By Emmanuel K. Dogbevi