Other State Department Archive Sites

The State Department web site below is a permanent electronic archive of information released online from January 1, 1997 to January 20, 2001. Please see www.state.gov for current material from the Department of State. Or visit http://2001-2009.state.gov for information from that period. Archive sites are not updated, so external links may no longer function. Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.

Country Commercial Guides for FY 2000: Ghana Report prepared by U.S. Embassy Accra, released July 1999

CHAPTER IV:   Marketing U.S. Products and Services

1.   Distribution and Sales Channels

The channels of distribution available to U.S. suppliers of goods and services in Ghana are wholesalers, retail outlets, and agents or distributors. Some suppliers sell directly to the government while others sell to indigenous associations. The most important trading center for U.S. products and the most populous area of the country is the Accra/Tema Metropolitan area (pop. approx. 3.5 million). Other large cities, in order of size and importance for marketing U.S. products, are Kumasi (pop. approx. 1 million), Sekondi/Takoradi (pop. approx. 400,000), Tamale (pop. approx. 400,000), Sunyani (pop. approx. 200,000) and Cape Coast (pop. approx.150,000.) Exporters are advised to consider the requirements of the product and the potential market before choosing a distribution channel.

2.   Use of Agents/Distributors; Finding a Partner

While there are no laws requiring the retention of a local agent or distributor for a foreign company exporting to Ghana, American companies wishing to enter the Ghanaian market are strongly advised to retain a business person or persons resident in Ghana to market their products. An agent or distributor should possess a thorough understanding of the economy. If the exported product requires servicing, qualified personnel and a reasonable inventory of spare parts must be considered. Exporters should be aware that agents and distributors commonly represent several product lines.

While in the past Ghanaians had a preference for made-in-Britain and Asian goods, there has been increased interest of late in American products because of their perceived superior quality and lower price. While European competitors market their geographic proximity as a competitive advantage, Ghanaian businessmen and women have expressed their willingness to pay a sometimes higher price (because of transportation costs) for an American product since American companies enjoy the reputation in Ghana of providing excellent after-sales service. It should be noted that transportation costs from the U.S. are also dropping because of new direct air connections between Accra and Atlanta, as well as shipping from Baltimore directly to the port of Tema in Ghana.

Prior to committing to a long-term relationship, exporters are advised to visit Ghana to gain firsthand knowledge of the country. The Commercial Service can help exporters locate agents and distributors through the Agent Distributor Service (ADS) program. Information regarding this program is available through the Commercial Service district offices located in all 50 states and Washington, DC. The cost of a report is USD 250.

Exporters may also wish to use the International Company Profile (ICP), a service for checking the reputation, reliability and financial status of a prospective trading partner. The information is in the form of a confidential report, along with a recommendation from commercial officers at the U.S. Embassy as to the suitability of the company as a trading partner. A fee of USD 100 per company is charged.

The Commercial Service offers another unique facility for U.S. business people - the Gold Key Service, a custom-tailored service for U.S. firms planning to visit a country. It provides the following:

1. Up to four scheduled appointments per day with a potential agent/distributor or contact
2. Services of a Commercial Specialist on all calls
3. Use of our offices in Accra's business center
4. Unlimited uses of our phone and fax for local calls (use our international lines at cost)
5. Basic secretarial and receptionist service
6. In-depth business, economic and political briefing by an American officer

Your one-time low cost:

1. USD150 is required for the first day of the service and USD120 for each subsequent day.
2. An additional USD100 per day for a business escort to your meetings, if requested.

The Commercial Section in Accra provided Gold Key Service to eight U.S. businesses in 1998.

Please inform the Commercial Service Accra at the address below at least three weeks before your departure to Ghana in order to facilitate this process.

The Commercial Service
United States Embassy Accra
Department of State
Washington, D.C. 20521-2020
or
P. O. Box 194 
Accra, Ghana
Tel:  (233-21) 235096, 229179
Fax:  (233-21) 235096/776008
Email: comserv@ghana.com

3.   Franchising

There is a growing interest in franchising in Ghana, an area that has potential for development, especially by smaller U.S. businesses. Under-capitalization of many companies discourages greater use of this approach to business.

4.   Direct Marketing

Wholesale establishments and many retail outlets are concentrated in Accra. These include company headquarters, branch banking, supermarkets and specialty shops. Several companies have opened branches in Kumasi and Takoradi. Both within and outside of Accra, most of the small-scale retail outlets are individual proprietorship operations that lack specialization. U.S. companies will require some presence in Ghana either through an agent, a distributor or a small business.

5.   Joint Ventures/Licensing

The Ghanaian Investment Code provides legislative encouragement for joint venture activities. However, joint venture arrangements with Ghanaian firms should carefully spell out areas of responsibility. Some local entrepreneurs operate under the impression that all costs will be borne by the foreign investor while expertise in selling to the local market is all that is required of them. Many potential local joint venture partners have little equity to offer and merely seek to capitalize on their knowledge of the local business environment.

6.   Steps to Establishing an Office; the Ghana Investment Promotion Center (GIPC)

All investors intending to invest in Ghana should first contact the Ghana Investment Promotion Center (GIPC). The GIPC is a government agency with two primary objectives: (1) the encouragement and promotion of investment in the Ghanaian economy, and (2) the coordination and monitoring of all investment activities.

One of the goals of the GIPC is to guide an entrepreneur through the local business registration process including handling the formalities to register, incorporate, modify or dissolve a local company. The GIPC was established under the Ghana Investment Promotion Center Act of 1994 as a one-stop shop for economic, commercial and investment information for entrepreneurs interested in starting a business or investing in Ghana. The GIPC utilizes databases, documentation, formal presentations, investment missions, country-specific investment fora and basic counseling services to carry out its activities. Under the GIPC Act of 1994, investment projects in all sectors of the economy, other than the mining and petroleum sectors, are free to establish without prior approval of the GIPC. Mining and petroleum sector projects have to be approved or licensed by the Minerals Commission and the Ghana National Petroleum Corporation.

The first step in the incorporation of a company is normally to ascertain from the Registrar of Companies whether the desired name is available. When this is cleared, a copy of the proposed regulations of the company must be delivered to the Registrar for registration. The regulations must contain the following: (1) the name of the company, (2) the nature of the business or the objects for which the business is being established, (3) the names of the first directors, and (4) the limits of the powers of the directors with regard to the provisions of the Code. The Registrar has five working days to complete the registration formalities if application documents are received in good order. Upon registration of the regulations, the Registrar certifies under his/her seal that the company is incorporated by awarding a Certificate of Incorporation, which makes the company a body corporate with legal identity. After registration of the business entity, business enterprises are free to implement their projects, import equipment and clear these through Customs, Excise and Preventive Services (CEPS).

The principal forms of business organizations do not differ too much from U.S.-based companies. Apart from state-owned enterprises, there are (1) companies, including branches of foreign firms, (2) partnerships and joint ventures, and (3) sole proprietorships. Under the Companies Code, a company can take any of the following forms: (1) limited liability company or a company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them; (2) company limited by guarantee or a company having the liability of its members limited to such amount as the members may respectively undertake to contribute to the assets of the companies in the event of its being liquidated; and (3) an unlimited company or a company not having any limit on the liability of its members.

A company may be registered as a public or a private company. Every company with limited liability must include the word "Limited" as the last part of its name. All companies incorporated in Ghana must have at least one shareholder and two directors. The Act also requires all companies to file annual returns with the Registrar of Companies.

Prior to establishing a business entity in Ghana, it is advisable to consult a local attorney. The cost for this should not exceed USD 200. The Commercial Service maintains an up-dated list of attorneys in Ghana, several of whom have worked and/or studied in the United States.

7.   Selling Factors/Techniques

Ghana maintains strong historical, cultural and economic links with Britain. Other major foreign investments are from Germany, China and India. However, there is an increasing demand for U.S.-made goods and a liking for things "American" in general. It is nonetheless important that U.S. companies establish and maintain a high level of personal contact within Ghana; it is generally not possible to mount a successful enterprise via telephone, email or fax contact alone.

Like its neighbor, Cote d'Ivoire, Ghanaian values are more traditional than those of Americans'. This tendency extends to business dealings as well. People are extremely polite; it is customary to greet everyone you meet. Even a long-term partner or business contact is usually greeted with an exchange of pleasantries, followed by a handshake and inquiries about one's health, family and relatives. Never walk into a person's office or begin a telephone conversation without a greeting. The few newcomers who have made the mistake of beginning a conversation without the necessary greeting report being told by their host(s), "But you have not greeted me (us)." Ghanaians are often referred to as "the friendliest people on the continent." They are warm and receptive of outsiders, are very accommodating and will go the extra mile to be helpful. Ghanaians like regular, face-to-face contact and personal visits are warmly welcomed. While paying visits may not always be the most efficient or inexpensive method, it is generally regarded as the most effective method of handling new trade initiatives.

Although many Ghanaian businesspeople are well traveled and understand the Western saying "time is money," it is advisable for the business visitor to Ghana to adapt to a pace of business and life that is slower than in the U.S.

The Lebanese and Asian (primarily Indian) communities play an important role in business in Ghana. Many Lebanese businesspeople are third and fourth generation Ghanaian citizens, and while they may educate their children in Lebanon (and Britain) and travel there for business and recreation, they consider Ghana their home in a real sense.

8.   Advertising and Trade Promotion

There are more than a dozen advertising agencies in Accra. A few of the larger companies offer the full range of publicity and sales promotion services in the main population areas. Three of them, Lintas, Design & Display Publicity, and Media Majique are affiliates of American companies. While many of the smaller companies pass themselves off as "advertising" companies, they are engaged primarily in designing and printing. The Commercial Service can be of assistance in identifying suitable companies for brand representation and the identification of leading publications with general or specialized readership. There are also several companies that offer market research.

Following is a list of major newspapers and business journals:

Ghanaian Times	
Daily Graphic
Ghanaian Chronicle	
Marketing Outlook
Business and Financial Times
Business Chronicle
High Street Journal

The first two publications are pro-government dailies, while the "Chronicle" is an opposition paper. Ghanaians own more than 2 million television sets and over 13 million radios, and are accustomed to consumer-oriented commercials and advertising, as well as public service announcements. With three television networks currently being broadcast (G.T.V., TV3 and Metro TV), and six pay-per-view networks rebroadcast by satellite, advertising through the media has taken a quantum leap. There are now 23 FM and 6 AM radio stations throughout Ghana (up from only one in 1994), and these all feature regular advertisements. Suppliers of imported products are expected to provide advertising and promotional support, particularly if it is a new product or brand. As well as radio and television spots there are also posters, point of sale displays and billboards. Trade fairs are an increasingly popular means of reaching the Ghanaian buyer. (See Chapter XII, Trade Events in Ghana.)

Packaging is important to the Ghanaian consumer. Eye-catching, colorful designs appeal to the consumer. Extended shelf life in a warm and humid environment is an important factor.

9.   Pricing Product

Ghanaians tend to be very price conscious with respect to most purchases. Increasing sophistication is leading some buyers away from the low cost alternatives that result eventually in higher replacement costs. Costs should be computed on a CIF (Cost, Insurance and Freight) basis.

Local sources of commercial credit are extremely limited. Also, until recently, real interest rates on deposits have been negative, giving individuals little incentive to hold savings in bank accounts. People prefer to hold cash, so that the amount of currency in circulation is large when compared with bank deposits. Bank lending to the private sector is constrained by high interest rates and heavy borrowing by the government in local markets. U.S. exporters are advised to utilize an irrevocable, confirmed letter of credit, especially if they are non-resident and new to the Ghanaian market.

The Commercial Service can help exporters formulate sound credit policies applicable to local markets and credit information on individual Ghanaian firms through the International Company Profile (ICP) program (see Chapter IV, 2 for details). Information about ICPs is also available through the Commercial Service district offices located in all 50 states and Washington, DC. Similar information can be obtained from private agencies.

10.   Sales Service/Customer Support

Goods sold in Ghana are frequently subjected to heavy use and are often not maintained in accordance with the manufacturer's recommendations. Service contracts, product recalls, and work performed under warranty have not been widely familiar, but are becoming more and more commonplace.

There is a genuine interest in Ghana in trading with the U.S. Businessmen and women cite low prices, after-sales support and the high quality of American goods as reasons for the interest. High-tech or heavy industrial equipment such as computer hardware and software, telecommunications equipment, photocopiers, automobiles, air conditioning/refrigeration units, heavy mining and earth-moving equipment have all enjoyed reasonable success in the Ghanaian economy of late. Readable service manuals, frequent personnel training and an adequate inventory of spare parts are important for success in the Ghanaian market.

11.   Selling to the Government

The Ghana Supply Commission (GSC) is the government entity entrusted with responsibility for procurement on behalf of the government and its various instrumentalities. The GSC commonly provides a 45-day tendering period on procurement contracts being let. The point of contact for GSC is c/o the Chief Executive, P.O. Box M 35, Accra, Tel: 233-21-228131, and Fax: 233-21-668452. The procurement is typically financed by a multilateral lending institution such as the World Bank, the African Development Bank or the International Finance Corporation. There is usually a nominal charge to purchase the bid documents.

12.   Protecting Your Product from Intellectual Property Rights (IPR) Infringement

The protection of intellectual property is an evolving area of law in Ghana but strides have been made in recent years to afford protection to a variety of intellectual property under both local and international law. Ghana is a member of the World Intellectual Property Organization (WIPO) and the English-speaking African Regional Industrial Property Organization (ESARIPO).

13.   Need for a Local Attorney

It is advisable to consult a local attorney to ensure that the company is following all the appropriate laws and procedures with regard to employment and other matters. There are a number of Labor Laws which regulate employer-employee relations in Ghana. The Labor Decree of 1967 (NLCD 157) established Public Employment Centers to assist job seekers find work. It also addresses workers' contracts and agreements and regulates the employment of women, children and young persons.

The Industrial Relations Act of 1956 (Act 299) regulates industrial disputes and the collective bargaining process. It also sets up the Trades Union Congress, which acts as the representative of the trade union movement in Ghana.

There is no legal requirement for labor participation in management. However, joint consultative committees where management and employees meet to discuss issues affecting the productivity of the business are common.

There are no statutory requirements for profit sharing, but fringe benefits in the form of year-end bonuses and retirement benefits are generally included in collective bargaining agreements.

Again, consulting a local attorney with regard to labor issues is recommended. The Commercial Service maintains a list of local attorneys, which is available upon request.

14.   Performing Due Diligence/Checking Bona Fides of Banks, Agents and Customers Please refer to the information about our Gold Key Service, Chapter IV, 2.