The UK and Ghana have far-reaching historical, economic and political connections and not only have several British businesses that been trading in the Ghanaian market for over a century, some of the biggest names in the financial and telecommunication industries have a presence out there – big names like Barclays, Standard Chartered and Vodafone.
Top UK goods exports to Ghana include:
- beverages
- medicinal and pharmaceutical products
- road vehicles
- electrical machinery and appliances
- machinery specialised for particular industries
- iron and Steel
- textile fibres (not manufactured)
If you’re thinking of doing business in, or exporting to Ghana, here’s all you need to know…
What are the pros and cons of exporting to Ghana?
The UK is one of the largest foreign investors in Ghana. And with bilateral trade in goods and services totalling £1.05 billion, Ghana is the UK’s fifth largest export market in Sub Saharan Africa.
The strengths of the Ghanaian market include…
- expanding stock market
- well developed financial and legal services
- comparatively well developed infrastructure compared to most west African countries
- availability of skilled and trainable labour
And the benefits of exporting to Ghana include…
- immediate access to all ECOWAS markets
- English is the official business language and widely spoken
- 100% foreign ownership permitted
- judicial system based on English common law principles
- large consumer base with a growing middle class
- developing as a regional hub for opportunities in other west African markets
- export-free zones where goods traded with other countries are exempt from customs duties and some laws
On the downside, corruption is a possible pitfall when doing business out there (Ghana ranks 56 out of 168 on the corruption index), and other issues include…
- erratic power supply nationwide
- obstructive bureaucracy
- high unemployment and poverty
- underdeveloped capital market
- macroeconomic instability with some International Monetary Fund (IMF) restrictions on government spending
- a poor (but improving) social infrastructure
Scams can also be a big problem in Ghana, so never send goods on the strength of a cheque received or credit card details, especially if you’ve had no prior dealings with the business in question, and also look out for the following…
- request for contract registration or pre-qualification advance fees also known ‘419 fraud’
- transfer of funds from fictitious, over-invoiced or failed contracts
- promise of phantom contract or supplies
- sale of crude oil at below market prices
- invitation to share property or inheritance
- request for invitation letter for company representative to visit UK
- request for bank details or bank accounts
- cheque payment fraud or credit card fraud
And remember, you can now screen share and video conference, using Crankwheel.
How does tax work in Ghana?
A double taxation agreement exists between the UK and Ghana, so tax isn’t paid twice – once in each country – on exported goods and services.
The level of tax a company pays in Ghana is determined by its locations, the sector it operates in, and whether or not its listed on the Ghana Stock Exchange. The main taxes and rates include:
- Corporate Tax – general rate is 25%
- Income tax – rates are between 0% and 25%, depending upon annual earnings.
- Capital Gains Tax – 15%
- Valued Added Tax (VAT) – 20%, with some exemptions
How will I be affected by customs in Ghana?
Ghana currently uses the Harmonized System (HS) Customs Code to classify goods, which means goods arriving in the country may be subject to import duty, VAT, special tax and import excise duty. Taxes that are assessed on the basis of weight, value or volume are subject to change each year.
The Ghana Revenue Authority (GRA) has information on the current tax, customs and excise rates.
