Business and Investment Climate Reforms in Ghana – Progress, Challenges and Issues

1. Business and Investment Climate Reforms in Ghana – Progress, Challenges and Issues Presentation to GTZ Seminar Mount Grace Country House Hotel May 22, 2006

2. PSD Strategy - Logical Framework • The Goal is sustainable, equitable and widespread private sector-led growth throughout Ghana • The Purpose is to enhance the competitiveness of the private sector • The 4 key Outputs are: • Enhance Ghana’s position in global and regional markets • Improve efficiency and accessibility of national markets • Improve competence and capacity at the firm level • Strengthen Government’s private sector policy formulation, implementation, monitoring and evaluation

3. Implementation Framework • Strategy co-ordinates Investment Climate Reforms of MDAs – Trade and Industry, Private Sector Development and PSI, Public Sector Reform, Local Government and Rural Development, Justice & AGs, Finance, Registrar-General’s, Investment Promotion Centre… • An Oversight Committee made up of the key Implementing MDAs and the private sector is overseeing implementation • Development Partners are providing financial and technical support for implementation • World Bank, DFID and DANIDA providing Pooled Funds • USAID, UNDP, JICA, IFC, Governments of Germany, France, Italy, Switzerland, Netherlands providing Aligned Support • EU providing Sector Budget Support • A Monitoring and Evaluation Framework has been designed and is being operationalised • Implementation will be based on regular and quality dialogue with the private sector

4. Key activities • Implementation of Trade Sector Support Program to provide a trade enabling environment - includes reform of quality standards institutions • Enhancing investment promotion activities • Improving operational modalities and performance of strategic export sectors • Reform of the Registrar-General’s Dept to reduce the time and cost for starting a business • Promotion of Public-Private Partnerships in infrastructure programs • Improvement in public sector service delivery through: • Institutional reform of the key agencies that interface with the private sector • Implementation of Customer Charters and a culture change program for key PSD-related Ministries, Departments and Agencies • Review of Local Government regulation, taxes and charges especially for MSMEs

5. Key activities • Policy and Regulatory Impact Assessment to ensure that policy and regulation do not impose undue burden on the private sector • Business law reforms, including review of the Companies Code in line with best practice • Institutional strengthening of Commercial Courts and promotion of Alternative Dispute Resolution • Monitoring of Financial Sector Reforms, Land Reforms; Infrastructure Programs; Agriculture Sector programs… • Implementation of a best-practice framework for firm-level initiatives and an action plan for the informal sector • Enhanced and quality dialogue with the private sector • Effective Monitoring and Evaluation of the PSD Strategy

6. Issues and Challenges • Business and investment climate reforms are necessary, but are they sufficient to achieve private sector development and growth – direct interventions at the firm level • Impact of globalization on the competitiveness of the private sector in Africa – Access to Markets • Coordination and Prioritization of activities – breadth and crosscutting nature of the reform agenda versus limited resources • Monitoring and Evaluation Challenges • Difficulty of setting realistic targets for activities • Ability to get accurate data/information to assess results • Attribution of reforms directly to results • Effectiveness of monitoring and impact assessment tools; e.g. World Bank Doing Business report

7. Issues and Challenges • Level of engagement of the private sector in the process • Strengthened private sector associations • Enhanced public-private dialogue • Capacity of MDAs to implement reforms – linked to wider public sector reform issues of motivation and capacity • Development Partners aligning their programs and support to Government’s reform agenda • Decentralization of the reform agenda to address specific constraints at the regional/local level • Political commitment to the reform agenda – reforms with medium to long-term impact for Government’s with short-term election cycles