INSIGHTS

By Nhyiraba Yaw Sompa Okyere

Doing business in Ghana presents immense opportunities, but it also comes with significant risks that businesses both local and foreign, must navigate.

As a Risk Management Practitioner for well over a decade and a half, the challenge has always been helping clients appreciate the biggest uncertainties they face and how they can navigate them.

If you have any form of business in Ghana, the biggest challenge you are likely to face now is economic stability. Let me explain:

• Unemployment & Lack of Economic Opportunity: Ghana has a youthful and growing population with limited job opportunities. This leads to reduced consumer spending and potential social instability. This means for whatever you sell, the market size may be way smaller than you think.
• Poverty & Low Disposable Income: Markets thrive when people have money to spend. High poverty levels mean businesses face lower demand, affecting revenue and profitability. It appears at best, businesses must of necessity become high-volume, low-margin to succeed, but how much volume can you trade to a nation with poverty figures around a third of its population?
• Economic Downturns: Fluctuations in GDP and economic slowdowns create uncertainty, making long-term planning and investment risky.
• Inflation: Rising prices increase operational costs and reduce consumer purchasing power, affecting demand for goods and services. This is made worse by currency instability and continuous devaluation of the Cedi.
• Public Debt: High national debt limits government spending on infrastructure, social services, and private sector support, impacting economic growth.

Yes, all these challenges and risks—and so what? Should businesses fold? Absolutely NOT!

For you to succeed in Ghana, however, you need to think and actively have economic resilience strategies, risk assessments, adaptive pricing models, and local market engagement, these are essential to increase the odds of success.

Here are some risk mitigation strategies to consider:

• Diversify Revenue Streams – Don’t rely on a single product or service. Explore multiple income sources as a business.
• Local Sourcing & Cost Control – Reduce reliance on imports by sourcing raw materials and supplies locally to manage costs against currency depreciation and inflation.
• Flexible Pricing Models – Implement dynamic pricing that adapts to inflation and fluctuating consumer purchasing power.
• Hedging Against Currency Risks – Businesses engaged in imports or foreign transactions should use financial instruments like forward contracts to protect against forex fluctuations.
• Strengthen Operational Efficiency – Invest in technology, automation, and lean management strategies to reduce waste and optimize costs.
• Market Segmentation & Targeting – Focus on value-based and tiered offerings to cater to different income groups, ensuring affordability and continued market relevance.

This article was written by Nhyiraba Yaw Sompa Okyere, a lawyer, enterprise risk professional, and author with extensive experience in finance, sustainability, and governance law in Ghana. He has over 15 years of expertise in enterprise risk management and regulatory compliance.