South African Businesses Raise Concerns About Ghana

SOUTH AFRICA businesses entering Ghana face a number of challenges and problems as do, other foreign investors.

Most of these constraints stem from differences in the structures of the Ghanaian as opposed to their home economics, cultural, dissimilarities and conflicting business practices.

Some of the major business constraints faced by the South African enterprises are based on inadequate disposable income.

With an average per capital of just $320 in 2003, Ghanaians suffer from lack of disposable income that constitutes a problem for South African companies operating in their countries.

Ghanaians have not seen their income levels increase in decades because of economic stagnation.

Many Ghanaians are opting for lower quality imitated products at lower cost from Asia instead of quality African products.

Over a third of Ghanaians are poor and only 43% of them live in the urban centres. The remaining 57% live in the rural and in most cases, deprived areas.

Mr. Millard W.Arnold, executive director of Studies, South African Institute of International Affairs disclosed in an interview with The Chronicle that he would not do business in Ghana or any other African country, but look elsewhere because of corruption.

Mr. Roberts Neuma Grobbelaar, deputy director of studies and head of Business in Africa project at the SAIIA also said the majority of South African businesses indicated that they did not consider corruption as a major obstacle to doing business in Ghana.

For example, in comparison with Nigeria, bribes are not a prerequisite to establishing a company or facilitating a business transactions in Ghana, even though they reported having had to give gifts, or provide favours in return for services rendered by Ghanaians.

Moreover, firms indicated that the government did not tolerate corruption when it came to large firms such as AngloGold Ashanti or Goldfields who contribute substantially to the national economy or are instrumental to specific industries. Instead, the government has blamed the level of corruption on foreign firms because they insisted on bribing Ghanaian officials in the past.

This was a result of the misconception that it is a required practice as it in many other African countries.

He told The Chronicle that the undeveloped infrastructure network in West Africa was also a problem.

Some South African countries complained that the government could do more to improve its infrastructure.

The Kotoka International Airport is the only international airport in Ghana, and owing to increasing trade tourism it is struggling to cope with the high volumes of passengers.

In 2001, it had more cargo than any air port in the region, because of instability in Nigeria and Cote d' Voire. At that time, Kotoka was used for 22% of all regional flights. This helped to lower heavy air farerates. However, the cost and delays are major obstacles for companies.

South Africa firmshave also complained about the lack of regular and reliable cargo space for exports both atairports. In terms ofairports, Ghanaian charges for freight are among the lowest in Africa.

However, port costs are higher in Ghana than in other African states with access to the sea and the ports are inefficient and do not use their existing capacity effectively