Document: Customising the Ease of Doing Business Survey Ghana - Starting a Business Trading Across Borders

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In 2005, the Government of Ghana (GoG) declared its vision to enter into a “Golden Age of Business.” The implementation of this vision is constrained by many factors as the private sector sees itself confronted with a variety of institutional and regulatory obstacles detrimental to its development. Businesses face a weak infrastructure, difficulties in obtaining credit, registering land, trading internationally and enforcing contracts to name but a few of these challenges. A comprehensive National Medium-Term Private Sector Development Strategy (PSDS) was launched to create a policy environment conducive to private sector-led growth. Through the PSDS, Government has committed itself to reducing the cost of doing business in the country. An assessment of the real costs of doing business is hereby a prerequisite to implementing business-friendly policies. Within this context and as part of the PSDS, the Ministry of Trade and Industry (MOTI) commissioned this study on the cost of doing business in Ghana.

Over the years, a number of indicators have been used to measure the cost of doing business. In particular, the World Bank’s Doing Business indicators have become a basis for discussions on the ease of doing business in Ghana. The World Bank uses ten indicators to measure the ease of starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

The methodology and consequently the results of the World Bank’s Doing Business surveys have been criticized by private and public stakeholders as not adequately capturing the realities on the ground. In order to examine the ease of doing business in Ghana based on criteria and assumptions acceptable to all stakeholders, GoG commissioned this study to assess the time and costs associated with completing all legal requirements and procedures for two of the ten indicators, “starting a business” and “trading across borders”. Contrary to the World Bank’s Doing Business indicators, this study tracks actual cases on a real-time basis. Results of the study are expected to form the basis of frank discussions and publicprivate dialogue to move the business environment reform agenda forward. Additionally, the results are intended to be used as baseline data to track reform progress.

In October 2006, an Inter–Agency Working Group was set up by the Ministry of Trade and Industry to propose the general approach and methodology for developing and institutionalizing the study. The group decided that the survey would be modelled after the World Bank’s Doing Business indicators but customised to reflect local realities. With support from the working group, MOTI developed a first draft of a customised methodology and hired consultants to review the draft methodology and to test it through a pilot survey. Before the pilot survey was carried out, the methodology was presented to stakeholders at a workshop involving implementing agencies and private sector organizations in July 2007. This led to further modifications of the methodology.
The pilot survey was conducted in August 2007 to assess existing procedures for starting a business and trading across borders. Interviews with officials of the relevant agencies and companies were conducted and records analysed. Results of the pilot survey were discussed at a second stakeholder workshop which informed the preparation of the methodology for the main survey. The main instruments used in the surveys were “Job Cards” and “Time and Motion Studies.” These instruments aim at assessing the actual time and costs associated with doing business in Ghana. The fieldwork for the main survey commenced in February 2008. This study attempted to track the actual costs, processes as well as the required time associated with starting a business and trading across borders. The first part of this monogram outlines the results of the study on starting a business while the second part illustrates the survey results for trading across borders. The annexes show how the field work was conducted, what instruments were used and outline the detailed field results obtained.

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Publication Year

2009

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