DOING BUSINESS IN GHANA: THE FACTS BEHIND THE FIGURES

Doing Business in Ghana: The facts behind the figures

Source: thebftonline.com
Date: 13th-november-2017 Time:  11:50:32 am

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The Doing Business (DB) survey is an annual report issued by the World Bank Group (WBG).  It ranks economies across the world on the time, ease and procedures required for a small to middle size domestic business, in the most populous city, to complete critical transactions.

The first DB survey measuring the business enabling environment of countries was launched in 2002 and published in 2003.  It covered 5 indicators and 133 countries.  Over the years, more countries have been added (Ghana was first ranked in the DB2008) as have 5 categories.

The 10 DB categories are – Starting a Business; Dealing with construction permits; Getting Electricity; Registering Property; Getting Credit; Protecting minority investors; Paying Taxes; Trading across borders; Enforcing Contracts; Resolving Insolvency.

The 2018 DB survey was completed in June 2017, 5 months after this government came to office.  It covered 190 countries. 

In Ghana, the respondents for the survey in Accra, were asked the same essentially basic questions.  What reforms if any have taken place within each of the categories that you know of; how has implementation, if any taken place; has this helped or made it more costly for you to do business?

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GET A GRIP

In the 2018 DB survey, Ghana’s overall ranking has dipped, again, from 108 to 120.  Between June 2016 and June 2017, – reported in November 2017 as the DB 2018 survey – we improved in the singular category of Dealing with Construction Permits.

In the sub region, whilst overall we are ahead of Cote d’Ivoire (139) and Mali (143) when you drill down to the details of the Distance to Frontier (DTF) – an analysis of best performance across all indicators since 2005 – our ranking of 57.24 fallS below the 50.43 average for sub-Saharan Africa. Not good.

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PLAYING THE LONG GAME

The WBG would like to think that their little survey is the silver bullet, the last and definitive word.  It is not.  It is one of many sources of open source information.

However, because the DB survey provides country specific as well as sub regional and global analysis and comparisons, governments attuned to self reflection, can use their DB survey results to determine if they have the data to support boasting rights for successful investment promotion, at home and abroad.

More times than often, the DB results mean it is time to suck it up and actually put in the hard graft required to right size the legal and regulatory frameworks.  Make it easier for the people who actually count long term, domestic investors, to do business, provide services, pay taxes, effectively compete and grow their profits and the economy.

The private sector, particularly domestic investors such as the Association of Ghana Industries, they issue their own business confidence barometers and know the value of public policy advocacy, can use the DB survey to reaffirm if the concerns that their membership have already independently raised are reconfirmed by another source of data. 

Foreign direct investors use the DB results as one of their due diligence checklists when considering joint or other investments.  Nimble civil society as well as wily politicians, can use the results of the DB survey to determine if they have another cane soaked in kerosene to apply when critiquing the performance of a government in delivering tangible results.

The DB like many other surveys can also be extremely useful for a journalist, assuming they are vaguely interested in actually holding politicians, of all stripes, to account.  It helps immensely if such a journalist is armed aforehand with facts and analysis.

One of the cardinal rules I learnt from the Master’s Program, Columbia University, School of Journalism, ‘do not ask a question for which you do not have context and more than an inkling of what the right answer should be.’

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HAVING A LAUGH

The commentary section of end of term reports provided avenues, where suggestive paragraphs about my character were always inserted by a teacher.  If such a report card were being issued by the WBG on the DB 2018 results it would read something like this:

Dear Government, yes, you inherited a creaky system and within 5 months of assuming office, we still ranked you.  So, if during the 5 months, you did nothing specific to our little survey; if you announced reforms and did not implement them effectively, if at all; if the ‘reforms’ in reality means a government has actually regressed by making it more complicated for the average domestic investors AND if other countries are reforming faster than you in one or more indicators, then your DB category specific and overall rankings will be impacted, as yours have been.  Thank you.

Our best DB reforms per category took place between between 2007 and 2008, (during the administration of former President John (II) Kufuor).  In one DB year, we made strides in 5 of the 10 categories – Starting a Business; Registering Property, Getting Credit, Trading Across Borders and Enforcing Contracts. 

From DB 2009 – DB2011, we registered improvements in only one category.  For DB 2012 – DB 2014, we made no improvements and actually went out of our way to make it more difficult to Start a business and Trade across borders.  In 2015, we made it easier to deal with Construction Permits and Trade Across Borders.  In 2016 we improved in Trading Across Borders.  In 2017 we continued to improve in Trading Across Borders and made it more difficult to Start a Business or Deal with Construction Permits.

Mr. Ekow Spio-Garbrah is a self declared presidential aspirant for the minority National Democratic Congress (NDC) ahead of 2020.  From 2014 until the NDC was slung out on his ear, Spio Garbrah joined the government of former President John (IV) Mahama as Minister of Trade and Industry, the evidence of our DB rankings is there.  Thus Spio Garbrah’s recent comments, post the publication of the DB 2018 results, reflect the sum of his direct intervention as Minister and the collective efforts of the NDC of which he was a fully signed up member of the ‘B team.  Mate, you had more than 5 months and you were taking the mick.

FIRE FIRE

The University of Energy and Natural Resources has reportedly developed an information system that will utilise the first of its kind technology in West Africa, to support our parched Ghana National Fire Service (GNFS) predict, monitor, detect, alert on fire outbreaks on Ghana and the subregion.  In real time.

The Head of the University’s Earth Observation Research Center, Dr. Amos Kabo-Bah has met with the GNFS to discuss how to integrate the new Advanced Fire Information System (AFIS) software into our national system.

I insist on stating the obvious, funding research like the AFIS can lead to innovation, design and the roll out of technology critical in addressing our perennial problems.  From exorcising ghost names on the public payroll; locating addresses without reference to the ubiquitous ‘when you get to the junction look for the blue kiosk and the woman selling roast plantain on the corner’ directions; placing anxious students and National Service Personnel, without recourse to manual and inadvertent or deliberate manipulation, technology can make an efficient difference.  Unless the contract is inflated as it was by our Social Security and National Insurance Trust, by the AMERI power deal, then you are having a different conversation.

In the last in the series of lectures held at the Institute of Economic Affairs (IEA) to round of our 60th anniversary year.  Professor Yifu Lin, a former Senior Vice President and Chief Economist of the WBG, has a fascinating back story.  A Taiwanese military officer, he apparently swam across the straits to mainland China, found his way to the University of Chicago where he studied Economics, has written more than 30 books and currently serves on the highest economic decision making body of China.

The topic – ‘How to Achieve a Dynamic, Inclusive and Industrialised Economy in Ghana: A New Structural Economics Approach’ (NSE), felt dry.  What I found particularly interesting, was his submission, that beyond obediently following structural adjustment with Known Performance Indicators like the DB rankings, countries like Ghana have other options.

Identify where we have a comparative advantage – natural resources and a potential large employment pool.  His submission was that there are many developing countries who can ‘boast’ of same and are still poverty stricken.  The difference, he claims, that is if we are man and woman enough, is  a) provide incentives for first movers – such as applying scare resources in state supported research that can lead to innovation and the development of technology to reduce the cost of doing business; b) identify latent competitive advantages and focus on those and c) facilitate entry to new industries – through technology parks where cutting edge infrastructure etc is provided to reduce transactional costs for companies who dare.  Subsidies should be time bound.

Sounds simplistic until you consider that the 13 most successful economies who have grown continuously for more than 25 years at an average 7% or more, have applied this recipe.

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I have no idea what the Minister of Finance, Ken Ofori-Atta will present to Parliament in the budget.  Beyond the obvious, revenue generation and collection, paring down our inherited national debt and a review of the bold claims he set out in the previous Asempa budget.

Will there now be clarity on moving beyond reliance on our natural resources – gold, cocoa and oil –  to address funding of education, and healthcare.  Did we create enough business space and collect enough revenue?  Will this Minister signal policies that will move our DB rankings up and put us on the long hard path to an NSE?

At any rate, the minority will spew fire and brimstone so even before the new AFIS is integrated, please, someone pass them a cold towel.  The media will be subjected to bombastic statements, please apply the Columbia J School rule – it is not a headline because he/she claims it to be so.

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