Ghana's Business reforms hailed

Ghana is the global top reformer in improving access to credit and still, overall, the easiest place to do business in West Africa, the International Finance Corporation, an arm of the World Bank’s 2011Doing Business Report, has revealed.

In the sub-region, Ghana remains overall the easiest place to do business and ranks top in two other indicators - Registering Property and Paying Taxes - the report said.

The report also 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 said the establishment of the centralised Collateral Registry and improved credit information and legal rights, through granting an operating licence to a private credit bureau, positioned the country from 77 to 67 - moving up 10 places among countries where doing business is favourable.

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, have 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.

Banks have long cited a legacy of bad loans as reason for maintaining basic lending rates at anything up to 29 percent - more than double the current 13.5 percent central bank prime rate - despite repeated calls from authorities to ease credit.
The high lending rates have been cited as a drag on the economy, which is due to grow around 6.6 percent this year,

The establishment of the registry is expected to bring down lending rates since the risk factor that is always the concern for the lenders has been automatically addressed

The 2011 Doing Business report, titled ‘Making a Difference for Entrepreneurs’ and eighth in the series of annual reports, ranked 183 economies around the world which have improved the environment for private businesses to thrive and also benchmarked the regulations that enhance business activity and those that constrain it. The data are current as of June 2010.

Launching the report in Accra, acting Country Manager, IFC, Brigid Amoako said:”I am pleased that Ghana 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.

“This year Doing Business 2011 introduces a new indicator - getting electricity. This and the employing workers indicators are not included in the ranking on the on the overall ease of doing business ranking. This report also features cumulative five-year trends of the focus and pace of legal and regulatory reform in the economies surveyed.

“IFC working with 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.”

The rankings also revealed that Ghana made some strong showing in protecting investors ranking 44th out of 183 countries. The rankings also showed that Ghana has shown continued improvement over the past five years in improving the environment for doing business.

Sierra Leone was named as 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 neighboring Cote d’ Ivoire makes it easiest in legally Closing a Business.

Ghana, which is due to join the ranks of the world's oil producers later this year, was among the world's top-ten fastest-improving business venues, according to the report.

Overall, it ranked fourth in Africa in improving the general business environment after Mauritius, Rwanda and Tunisia.

Since 2005, about 85% of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Among the 30 most-improved economies during those five years, a third are in sub-Saharan Africa - Burkina Faso, Ghana, Madagascar, Mali, Mauritius, Mozambique, Nigeria, Rwanda, Senegal and Sierra Leone.

Governor of the Bank of Ghana, Kwesi Amissah-Arthur who was overwhelmed with the performance, welcomed the country’s new position as a top business reformer in the sub-region, adding that the improvement in business reforms is aimed at growing the country’s business sector.

“It is great news and a positive achievement as far as private business is concern. We are confident it will benefit the stakeholders in both the private and the public sectors to grow the Ghanaian economy,” Amissah-Arthur remarked.