In 1995, the United States trade deficit with Ghana was $29 million, a
decrease of $45 million from that in 1994. U.S. merchandise exports to Ghana
were $167 million in 1994, $42 million more than those in 1994. Ghana was the
United States' ninety-sixth largest trading partner in 1995. U.S. imports from
Ghana totaled $196 million in 1995, a one percent decrease from those in
Tariffs and Structural Policies
Ghana is a member of the WTO. During the course of the structural adjustment
program, begun in the early 1980's, Ghana progressively wound down import quotas
and surcharges. Tariff structures are being adjusted in harmony with the
Economic Community of West African States (ECOWAS) trade liberalization program.
With the elimination of import licensing in 1989, importers now are simply
required to sign a declaration that they will comply with Ghanaian tax code and
other laws. However, special permits are still required for some imports.
Ghana's tariff structure addresses capital goods, intermediate goods and
consumer goods. There are now three ad valorem import duties: 0 percent, 10
percent and 25 percent. In addition, a specific duty of 10 percent to 40 percent
is imposed on 16 types of merchandise including textiles, alcoholic and non-
alcoholic beverages and tobacco. These are aimed at putting local manufacturers
on an equal competitive basis with imported goods.
The Ghanaian Government is committed to the development of competitive
domestic industries with exporting capabilities. The Government is expected to
continue to support domestic private enterprise with financial incentives, tax
holidays and other similar programs. Nevertheless, Ghanaian manufacturers argue
that Ghana's tariff structure places local producers at a competitive
disadvantage vis–a–vis imports from countries enjoying greater production and
marketing economies of scale. Reductions in tariffs have increased competition
for local producers while reducing the cost of imported raw materials. However,
the steady depreciation of the CEDI during the past year has had the effect of
partially offsetting this effect for importers of these materials.
Under its current economic reform program, in addition to reducing tariffs,
the Government has enacted various forms of personal and corporate tax relief.
In 1993, the Government eliminated the experimental "super sales tax" on luxury
vehicles and consumer goods and maintained lower tax rates on annual personal
income below the equivalent of $17,500. While the top corporate tax rate is 35
percent, the new investment code now provides that income earned from investment
in export industries will be taxed at a 20 percent rate.
Ghana completed the elimination of its import licensing system in 1989.
The investment code allows foreign investors to participate in all economic
sectors except for four that are reserved for Ghanaians. These activities are
petty trading, the operation of taxi services, lotteries (excluding football
pools) and the operation of beauty salons and barber shops.
STANDARDS, TESTING, LABELING, AND CERTIFICATION
Ghana has issued its own standards for food and drugs. The Ghana Standards
Board, the testing authority, subscribes to accepted international practices for
the testing of imports for purity and efficiency. Under Ghanaian law, imports
must bear markings identifying in English the type of product being imported,
the country of origin, the ingredients or components, and the expiration date,
if any. The thrust of this law is to set reasonable standards for imported food
and drugs. Locally manufactured goods are subject to comparable testing,
labeling, and certification requirements.
The new investment code eliminates the need for prior project approval from
the Ghana Investment Promotion Center (GIPC). Registration, essentially for
statistical purposes, is normally accomplished within five working days.
Investment incentives are no longer subject to discretionary judgements––they
have been made automatic by incorporating them into the corporate tax and
customs codes. Incentives include zero–rating import tariffs for plants and
generous tax incentives. Immigrant quotas for businesses, though relaxed, remain
in effect. In anticipation of the new and liberalized foreign investment regime,
the GIPC recorded a marked increase in investment registration of over 600 in
U.S. investment in Ghana is predominantly in the mining and fabricated metals
sector. There is also significant U.S. investment in the petroleum, seafood,
telecommunications, chemicals and related products, as well as, wholesale trade
sectors. Labor conditions in these sectors of the economy do not differ from the
norm in Ghana. U.S. and other foreign firms in Ghana are required to adhere to
Ghanaian labor laws, including restrictions on the number of expatriates
Lack of local financing and traditional hard currency shortages, which are
attributable to constant trade deficits, constrain local traders, as well as,
investors seeking foreign joint venture partners. High interest rates, lack of
liquidity in the financial system and frequent Ghanian inability to access
offshore financing constrains industrial growth and helps preserve the
micro–scale of most Ghanaian businesses. The legalization of foreign exchange
bureaus has made foreign currency readily available in Ghana, but strong demand
for imported goods has led to a decline in the foreign exchange value of the
CEDI during 1995. Domestic inflation is currently running at about 60 percent
and the Bank of Ghana has been pursuing a tight money policy to contain
inflationary pressures in the economy.
Bureaucratic inertia is a problem in Government ministries and administrative
approvals often take longer than they should. Entrenched local interest
sometimes have the ability to derail or delay new entrants, and securing
Government approvals too often is dependent upon an applicant's contacts.
Government purchases of equipment and supplies are usually handled by the
Ghana Supply Commission (theofficial purchasing agency), through international
bidding, and, at times, through direct negotiations.
Former government import monopolies have been abolished, but parastatal
entities continue to import some commodities although they no longer receive
government subsidies to finance imports.
At its peak, the Government of Ghana controlled more than 300 parastatals,
but is now in the process of divesting most of these. Progress, however, has
been slow. The political leanings of the Ghanaian partners of foreign investors
are often subject to close government scrutiny. The privatization of a
Government–controlled enterprise may be stalled if an interested party is known
to be sympathetic to the political opposition.