Business and politics in Ghana – Woes of business Moguls

The business environment in Ghana reveals a worrying trend, which requires urgent attention to boost investor confidence in corporate Ghana. The issue is a greater percentage of key projects and businesses deals are controlled by the state. Consequently, investors as well as local businessmen strive to win the favour of the political party in power to get lucrative contracts and business deals. In the end as the ruling party is out of power, the business deals and contracts awarded come to an abrupt end. Usually the in-coming government tend to review or cancel most contracts and business deals of the preceding government.

Business deals


It is a known fact that the government is the key client in business deals in the retail as well as manufacturing sector. The government is a valued customer for the auto companies in the country. It buys more cars from these companies than individuals or private companies combined. The government buys cars for serving ministers and other appointees. It buys fleets of cars for the presidential motorcades and state protocol cars. The NPP government bought fleets of luxury cars during Ghana at 50 celebrations. The government approves car loans for 200 sitting MPs to buy cars every four years. When the late Prof Atta Mills approved £50.000 car loans for MPs there were reports, car dealers flocked parliament house looking for business deals.


Again the government is a key client to most construction and engineering companies. Service providers like the banks, insurance companies, telephone/mobile phone providers, hotels all regard the state as their valued client. The state usually book hotel rooms for conferences and foreign dignitaries on regular basis. All the state cars require insurance policies etc. The state borrows from the banks. In fact state organisations and affiliate bodies control business deals in the energy, road & highway, education, health, aviation, oil etc sector.


The reality is most businesses recognise the significant role the state plays in the expansion of their business and are not taking chances. They also know such lucrative deals play key role in their profit margin. As a result, most contracts and business deals are often tainted with political under dealings. The sinister thing is companies or individuals on the other side of the political divide are denied such opportunities.


Regrettably, these practices do not create favourable environment for the development of indigenous businesses. Given that, a party in power have life spans of at most 8yrs in power. A change in government will definitely spell doom to most of these party affiliates or favoured companies. In the past, we have thriving party affiliated companies like EA Masai Group of Companies and CASHPRO that were hard hit after the NDC lost the election in 2000. Apart from that most construction companies, advertising agencies, consulting firms etc that were given thirst-quenching contracts during the days of the NDC folded up when the NPP won the election.

This phenomenon surfaced when NPP was booted out of power in 2008. NPP affiliated companies folded up with lightning speed. Databank Financial Services was reported to experience some hitches after acquiring the toxic assets of Statesman newspaper. This paper was allegedly receiving state support during the NPP era. This was withdrawn by the current government just as NPP withdrew state support for the Palaver/Democrat newspapers when the NPP was in power.


Caterers providing meals for the School Feeding Programmes felt the pinch as their contracts were reviewed as well. Overall most businesses that came with the NPP regime went into oblivion as their contracts were axed. The Ghana@50 Committee was set up to examine some NPP business deals and contracts.


There was an influx of Nigerian business moguls in the country during the NPP regime from 2000 to 2008. Some of these moguls systematically went into extinction. TV stations, advertising companies and other businesses owned by these moguls struggled to remain buoyant because contracts were not forth coming.


Disincentive to investment


The irony is our political leaders go globetrotting in the name of wooing investors. JA Kuffour went globetrotting during his 8 years in power looking for investors. When NPP went out of power most of these investors are struggled to survive. Similarly, JJ Rawlings also did same and brought in some investors. Most of these investors suffered awfully under NPP regime as well. Currently President Mahama is out there convincing investors to come and invest in Ghana. What would be the fate of these investors in the near future?

What we do not realised is cynical sales of state enterprises and subsequent calls for review of such sales results in lack of investor confidence in the system. In order to continue reaping the benefits of direct foreign investments its necessary we put in place safety mechanisms to shield investors. A change in regime should not mean an automatic re-evaluation of contracts and business deals of the preceding regime. We should find a way of circumventing this routine of the demise of businesses with the fall of the party in power. Perhaps we should get neutral bodies to handle state contracts, business deals and sale of state enterprises.


Business and politics in Ghana is too entwined and there is the need to delink both. Award of business deals and contracts must be on merits and ability to deliver and not on political affiliation. Business moguls and ventures who affiliate themselves to political parties must also realised it comes with a price. The demise of that party could spell an instant doom to their investments. Businessmen who want to remain in politics must be aware the life span of their businesses could be just 4 years or at most 8 years.


Francis Kwaku Kuma - Lecturer, Koforidua Polytechnic


Kwakuhull@yahoo.com