Aspects of "Doing Business 2007" report challenged

Accra, Oct. 11, GNA - Interest groups in Ghana's industrial and business sectors have variously challenged a report on "Doing Business 2007" in selected countries and published by the World Bank and the International Finance Corporation (IFC) in Accra on Wednesday.

The Report, which concentrated, on reforms in the general business environment in 10 specific areas in 175 countries placed Ghana on top of her African peers but said there was much to be done in reducing the number of days to start a business which currently stands at 81 days. This ranked Ghana 145 out of the 175 countries selected.

The nation's employment laws were also found to be rigid while the time for registering a property was also found to be quite high. The global least time for registering properties in days was one for Norway while Ghana came eighth with 382 days among the African countries included in the research. Overall, Ghana ranked 94. Ms Elise Addo, Managing Consultant with Lawfield Consultants, Nana Owusu Afari, First Vice President of the Association of Ghana Industries and Dr Robert Osei from the Institute of Social, Statistical and Economic Research (ISSER) all expressed divergent view on the Report before Mr Alan Kyerematen, Minister of Trade and Industries and Private Sector Initiatives, said the Report put Ghana on a new perspective in the eyes of investors as an attractive destination for doing business. Mr Kyerematen, who is also the Minister in charge of the President's Special Initiative, however, said that the issues raised by the Report as areas of limitation to doing business in Ghana could only be non-existent if the Government received enough financial support. He said the design of the reforms were enshrined in policies, whose formulation were quite easy but the required financial assistance to implement them was unavailable and urged development partners to lend their support.

He observed that there was no need for Ghana to design new reforms when those designed earlier such as the trade policy, gateway project and port rehabilitation projects had not been fully implemented for lack of funds.

The Ministry of Trade and Industries was doing all it could to reform the business sector but Mr Kyerematen said this was not easy because if care was not taken, the country would be exposed to all kinds of competitive challenges.

He said the Ministry also found itself in an uneasy position where it had to satisfy local industries, the importing trading communities and the consumers at the same time.

Ms Addo said the data provided by the Report was useful in giving an idea of what was working and what was not working.

She, however, said some of the indices were inaccurate. She cited the number of days for starting a business, which was 81 days down from 120 days recorded in last year's report.

She said at a glance the decrease in the number of days looked good but the components obtained in arriving at the figure were misleading because depending on what a company intended to do, the days could decrease further.

Ms Addo explained that certain businesses needed the corporate seal on their share certificates for contracts and this could take about three months therefore any company which did not require those conditions to do business had less days to start operating.

She also identified environmental permits as industry specific requirement and said since it took 10 days to acquire the permit, the number of days for starting business in Ghana was relative.

On legal enforcement, Ms Addo said the introduction of six commercial courts had improved and increased the pace of legal dispensation but this was not reflected in the Report.

She also identified improvements in the registering of businesses and said that a look at the indicators would have put Ghana further up the ladder to reform five areas instead of three.

Ghana's rating was reforms in cost of registering property, which gives security, confidence and offers the opportunity to transform the registered property into cash. Other performing factors were the reforms in tax rates such as the corporate tax which has come down from 32.5 per cent in 2004 to 25 per cent in 2006, reconstruction levy, which has also reduced to 1.5 per cent from 2.5 per cent and the general tax rates decreasing from 35 per cent to 32.3 per cent.

Trading across borders in Ghana has also improved as a result of the computerized system at the customs and speeding up document preparation for import and export processes.

Despite the reported reforms for the identified indicators, Ms Addo said there was concern about the quality of the reforms and who were the drivers of the reforms.

She said the reforms in Ghana so far had been driven by Millennium Challenge Account (MCA) and International Development Agency (IDA) requirements among others but then "we want to see the days when demand for reforms will be home driven. "This would ensure a sustained reform programme."

She also urged the Government to speed up the reform processes saying that it took the Government seven years to pass the Labour Act after which the laws were outmoded.

She called for increased human resource capacity for the Attorney General's Department.

Nana Owusu Afari said the credit for the reforms should go to the private sector that put pressure on the Government to design and implement them.

He, however, said the indicators did not reflect the facts on the ground such as the lack of haulage infrastructure. He identified the Railway Sub-Sector of the Transport Sector, power outages and unreliable telecommunications infrastructure as some of the impediments to doing business in Ghana.

Nana Afari said if the reforms had real impact on businesses the British American Tobacco Company would not have relocated its production sector to another location.

Dr Robert Osei said the reforms did not reflect the flow of Foreign Direct Investment (FDI) into the country.

He said Vietnam and India attracted much more FDIs than Ghana, which is ranked higher in reforms than those two countries. Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said he was optimistic that the Government's efforts at soliciting input from the business community was likely to lead to improved budget and improved reforms.

The presentation of the Report is the fourth in a series presented so far and used indicators such as starting business, dealing with licences, employing workers, registering properties, paying taxes and protecting investors.