Ghana Corruption Report

The security apparatus presents business with high corruption risks. In fact, Ghana’s police are ranked by an overwhelming majority of citizens as the most corrupt institution in the country (GCB 2013). Extortion and bribery are widespread among the ranks of officers; the police are known for acting as private debt collectors, setting up illegal checkpoints, and carrying out arrests as a means to extort irregular payments from citizens or from business associates of the detained (FitW 2015, HRR 2015). The police are widely perceived as inept and are criticized for corruption or negligence of their duties (HRR 2015). Businesses believe Ghana’s police is not effective in enforcing law and order, and in protecting them from crime (GCR 2015-2016). More than half of companies pay for security in Ghana (ES 2013).

The Commission on Human Rights and Administrative Justice (CHRAJ) is charged with investigating corruption among the ranks of police officers (GI 2016). The government also set up the internal investigative unit, the Police Intelligence, and Professional Standards Unit (PIPS), yet complainants are skeptical to report on corruption and abuse as the PIPS mostly comprises police officers whom, in turn, might shield their colleagues from the investigation (GI 2016).

The public services carry a high corruption risk for companies. Public administrations are perceived as corrupt and inert (BTI 2016). Bribes and irregular payments are often exchanged in return for obtaining public utilities (GCR 2015-2016). Low-level government employees have been known to ask for a ‘dash’ (tip) in return for facilitating license and permit applications, and companies applying for licenses and permits are frequently confronted with demands for facilitation payments (ICS 2014). Likewise, a quarter of business expect to present officials with gifts and irregular payments to ‘get things done’, while two in every ten companies report that gifts are exchanged in return for an operating license in Ghana (ES 2013).

Companies operating in the country cite the burden of government regulations as a competitive disadvantage (GCR 2015-2016). Although the Ghana Investment Promotion Center (GIPC) has failed to meet the standard of a one-stop-shop, it still serves as a facilitating mechanism for investors in the country (ICS 2016). Ghana performs better than the regional average in terms of time and cost required to start a company (DB 2016). Nonetheless, applying for a construction permit is more time consuming compared to neighboring countries (DB 2016).

Corruption is rampant in the land administration presenting businesses with high risks. Almost four in every ten companies expect to give gifts and irregular payments to officials to obtain a construction permit (ES 2013). Property rights are well defined and adequately protected to some extent in Ghana; this is mainly due to corruption and lengthy judicial procedures (BTI 2016). In rural areas land ownership is based on traditional laws, creating a high level of insecurity for investors and restricting access to finance since land is generally not accepted as bankable security (ICS 2014). Obtaining a clear land title is difficult, lengthy and complicated (ICS 2016). Registering property in Ghana is less time-consuming than the regional average (DB 2016).

The tax administration carries high corruption risks for companies. Bribes and irregular payments are widespread in meetings with officials (GCR 2015-2016). Tax collection and financial management has improved (BTI 2014), and Ghana ranks better than regional average in terms of the ease of paying taxes (DB 2016).

Companies point out that burdensome procedures and corruption at the border are among the most problematic factors for trade in Ghana. Trade is impeded by customs procedures that lack efficiency, and exporting and importing require time-consuming paperwork to clear goods at the border (GETR 2014). Corruption and bribery in these processes are very widespread (GCR 2015-2016). Ghana performs best in the West African region for road governance in relation to customs services, but controls and demands for bribes are increasing at the Tema port exit (UEMOA, 2014).

Companies contend with high corruption risks when dealing with Ghana’s public procurement system. Bribes and irregular payments are often exchanged in return for obtaining government contracts and licenses (GCR 2015-2016). Further, more than a third of businesses in Ghana expect to give gifts to procurement officials (ES 2013). Companies report that public funds are often diverted due to corruption and that procurement officials often favor well-connected individuals or companies when awarding public contracts (GCR 2015-2016). Some of the reasons fueling high corruption levels in public procurement include a weak government administration and the state being a major investor and contractor (BTI 2016). Companies cannot expect complete transparency in locally funded contracts, and there are allegations of corruption in the tender process; Ghana’s government has previously set aside international tender awards in the name of national interest (ICS 2016). Some contracts are awarded through sole or single sourcing where the procurement entity selects one supplier through noncompetitive bidding (GI 2016).

Online commercial scams are common in Ghana. Most commonly known as ‘Sakawa’ (online fraud), companies may receive unsolicited email proposals in the form of procurement offers tied to alleged Ghanaian government or the ECOWAS programs (ICS 2016). Foreign companies report being often contacted by an unknown Ghanaian firm claiming to belong to a governmental procurement entity and are lured into paying a series of fees to register or have their products qualify for sales in Ghana or the West African region (ICS 2016). Companies must thus, be extremely wary of such offers. Companies are recommended to use a specialized public procurement due diligence tool to mitigate the corruption risks associated with public procurement in Ghana.

A report put together by the CHRAJ cleared President Mahama from allegations of bribery after the president received a car from a construction firm from Burkina Faso bidding on a lucrative government contract in Ghana. The firm later secured the road-building contract. The president denied the corruption allegations claiming that the vehicle was a gift and that it was added to the government car pool. Despite that the CHRAJ cleared the president of bribery, it found him guilty of breaching government rules (BD Live, Sep. 2016).

Corruption is not uncommon when dealing with the natural resources sector in Ghana. Commercial fraud is especially prevalent in gold dealings; gold buyers are advised to be cautious and avoid middlemen. Potential buyers of gold and diamonds are strongly advised to deal directly with the Precious Minerals Marketing Company (PMMC) in Ghana, the sole authority through which gold and diamonds can be legally exported (ICS 2016). Prices are based solely on the London Exchange price on the day of export, and no discounting or negotiation of prices prior to export by the PMMC will be considered valid (ICS 2016). There is a lack of regulation covering the management of oil revenue, and Ghana’s institutions are not strong enough to handle the cash influx in a transparent way (BTI 2016). Ghana is a ‘compliant country’ of the Extractive Industries Transparency Initiative (EITI).

In an effort to ensure transparency in the management of natural resources, the government regularly publishes records surrounding total cost and revenue generated from oil production in Ghana (GI 2016). Nonetheless, these efforts lag behind when it comes to disclosure of financial records associated with gold mining and logging (GI 2016).