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UKGCC 2020 Business Climate Report: Access To Credit, Others Rank High As Inhibitors to doing Business In Ghana



 Findings from the UK- Ghana Chamber of Commerce’s (UKGCC) 2020 Business Climate Survey Report indicate that Ghana’s business environment is generally challenging, encumbered by such factors as limited access to capital; logistics partners and other service providers; quality infrastructure; tedious and onerous government processes; taxation policy; and regulatory framework.

According to the report, the requirements businesses need to meet to obtain credit for investment are usually daunting.

In some cases, it said the financial system may have its own challenges especially with capitalisation, as the recent financial sector clean-up showed.

By end of 2020, the report indicated that the financial system was deemed to be back on track with a well-capitalised banking system posting assets of GHC 149.3 billion, up from GHC 129.0 billion in 2019.

However, it said new loan advances dropped sharply year-on-year from 23.8% in 2019 to 5.8% in 20201, saying “This reflects the perspectives of businesses regarding access to capital. Nearly half of survey respondents rated access to capital as very poor, requiring urgent attention.”

It added that “the perspectives on access to capital vary by size of company. Micro and small companies with less than 50 employees were more likely to rate access to capital as very poor. 58.1% of micro companies and 25.8% of small companies rated access to capital as very poor. This is not surprising since bigger companies are usually better placed to access credit from the financial system due to their potential bigger asset base.”

Covering a variety of themes, the survey sought to capture the perception of businesses on recent policy and regulatory developments, economic and investment outlook through the analysis of 10 business environment components.

The survey also assessed the performance of businesses in the wake of the global COVID-19 pandemic and the preparedness of businesses for the opportunities presented by the African Continental Free Trade Area (AfCFTA).

Respondents, however, cited access to telecommunication facilities, utilities (water and power), security, crime-free environment and the effectiveness of the legal system; and quality labour as ameliorating factors to doing business in Ghana.

The Report recommends increased efforts in addressing both access to and cost of capital to enable businesses increase production and recover faster from COVID-19 shocks. It also recommends lowering of taxes to lessen the burden of operational costs to attract more investments; and continued dialogue with the private sector to ensure they thrive under the AfCFTA.

About the UKGCC

The UK-Ghana Chamber of Commerce (UKGCC) was established in 2016 to promote bilateral trade between the UK and Ghana. It is the leading UK business support organisation in Ghana.

The UKGCC provides exceptional support for its members through the sharing of knowledge and ideas, creating platforms for building stronger networks and providing linkages with  Government and its agencies. One of its key focus is to see Ghana become a significant economic partner for the UK as an export market, import source, investment destination and vice versa. It exists to further the business interests of its members across both countries and create more business opportunities.


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