Why Foreigners Own Ghana’s Biggest Companies While Ghana Millionaires Watch

In Ghana’s bustling economic landscape, a troubling paradox emerges while Ghana boasts several self-proclaimed millionaires, foreigners continue to dominate ownership of the country’s largest and most profitable businesses. From telecommunications to mining, retail, and oil, foreign entities command the lion’s share of the market, raising questions about economic sovereignty and wealth distribution.

This article by Samuel Kwame Boadu, Founder and Lead at SamBoad Business Group Ltd explores the reasons behind this trend, providing examples, figures, and insights into why foreign-owned companies thrive while local investors play a limited role in key industries.

Foreign-Owned Giants in Ghana: Brand Focus Africa’s Snapshot

1. Telecommunications Sector

The telecommunications industry is a cornerstone of Ghana’s economy, with millions of Ghanaians depending on mobile and internet services. However, the sector is overwhelmingly foreign-owned:

• MTN Ghana:
  • Parent Company: MTN Group (South Africa).
  • Revenue (2023): GHS 16.7 billion ($1.4 billion).
  • Market Share: 75% of mobile voice subscribers (source: NCA 2024 report).
• Vodafone Ghana (Now Telecel):
  • Parent Company: Telecel Ghana
  • Market Share: 16.8% of mobile voice subscribers.

These foreign giants dominate due to substantial capital investments, cutting-edge technology, and attractive incentives provided by the Ghanaian government.

2. Mining Sector

Mining is another sector where foreign dominance is evident:

• Newmont Ghana:
  • Parent Company: Newmont Corporation (USA).
  • Gold Production: Over 1.4 million ounces annually.
  • Contribution: Accounts for 14% of Ghana’s total gold production.
• AngloGold Ashanti:
  • Dual-listed in South Africa and the UK.
  • Operates the Obuasi and Iduapriem mines.

While Ghana is Africa’s largest gold producer, local ownership in the mining industry is negligible. NB: Most Ghanaians are made to believe AngloGold Ashanti solely belongs to a Ghanaian.

3. Retail Sector

• Shoprite:
  • Origin: South Africa.
  • Dominates Ghana’s supermarket chain industry, operating in key cities.
• Game Stores:
  • Parent Company: Massmart (South Africa).

Despite Ghana’s vibrant entrepreneurial spirit, foreign brands dominate formal retail, benefiting from economies of scale and global supply chains.

Why Do Foreigners Dominate?

1. Government Incentives for Foreign Investors

The Ghana Investment Promotion Centre (GIPC) Act provides tax holidays, duty-free imports, and capital repatriation privileges to foreign investors. These benefits attract multinational corporations, often at the expense of local entrepreneurs.

2. Access to Capital

Foreign companies typically have access to cheaper credit and substantial funding from international financial institutions. In contrast, Ghanaian businesses face high-interest rates, limited venture capital, and bureaucratic hurdles.

3. Local Millionaires’ Investment Patterns

Many wealthy Ghanaians prefer investing in real estate, luxury assets, and non-industrial ventures, which provide faster returns and less operational risk. For example, prominent Ghanaian millionaires like Dr. Osei Kwame Despite and Dr. Ernest Ofori Sarpong have concentrated their investments in media and real estate, leaving industrial sectors to foreign players.

Figures and Trends

• Foreign Investment in Ghana (2023):
  • $3.9 billion in foreign direct investment (FDI).
  • Top contributors: South Africa, the UK, and the USA.
• Local Business Representation:
  • Local businesses account for less than 10% of Ghana’s formal economy, according to the Association of Ghana Industries (AGI).

Impact of Foreign Dominance

Economic Benefits

• Creation of jobs.
• Transfer of technology and expertise.

Challenges

• Repatriation of profits limits wealth retention in Ghana.
• Dependence on foreign investors for economic stability.

What Needs to Change?

The dominance of foreign-owned companies in Ghana’s major sectors has raised concerns about economic sovereignty, wealth retention, and the capacity of local entrepreneurs to compete on a global scale. To address this imbalance, my SamBoad Publishing Team believe Ghana can draw lessons from other African countries that have implemented successful policies to empower local businesses and encourage greater domestic ownership.

1. Strengthen Local Business Capacities

Case Study: Kenya’s Equity Bank

• In Kenya, Equity Bank transformed from a struggling financial institution into one of the largest banks in Africa. The government provided favorable policies, including tax incentives and targeted financial inclusion initiatives, to enable the growth of indigenous financial institutions.
• Ghana can implement similar policies by offering low-interest loans, mentorship programs, and incubation hubs for local startups to scale operations and compete with foreign entities.

Proposals for Ghana:

• Establish state-funded incubators and accelerators targeting sectors like manufacturing, technology, and logistics.
• Offer grants and subsidies to local entrepreneurs entering capital-intensive industries like cement, telecommunications, and mining.

2. Revise Foreign Direct Investment (FDI) Policies

Case Study: Nigeria’s Local Content Act (2010)

• Nigeria’s Local Content Act mandates that oil companies employ Nigerian workers and source a significant percentage of goods and services locally. As a result, the country increased local participation in the oil and gas industry, creating jobs and retaining wealth.

Proposals for Ghana:

• Introduce a “Local Participation Act” that requires a minimum percentage of local equity in key sectors such as mining, retail, and logistics.
• Provide tax rebates for companies that partner with Ghanaian firms or have majority Ghanaian ownership.

3. Prioritize Industrialization

Case Study: Ethiopia’s Industrial Parks Development

• Ethiopia has become a manufacturing hub in Africa by building industrial parks with state-of-the-art facilities, offering incentives to companies that employ locals and export goods.
• The Hawassa Industrial Park is a notable example, attracting investments in textile and garment manufacturing while employing thousands of Ethiopians.

Proposals for Ghana:

• Expand on the “One District, One Factory” initiative by creating industrial parks that cater to Ghanaian small and medium enterprises (SMEs).
• Partner with development agencies to secure funding for such infrastructure while ensuring local businesses benefit from favorable leasing terms.

4. Build a Culture of Ownership and Investment

Case Study: Rwanda’s Focus on National Development

• Rwanda encourages citizens to invest in national projects through platforms like “Agaciro Development Fund,” a sovereign wealth fund driven by citizen contributions.
• This approach has fostered a sense of ownership and reduced dependence on foreign investments.

Proposals for Ghana:

• Introduce government-backed bonds or funds to allow citizens to invest in critical industries.
• Encourage Ghanaian banks to develop tailored savings and investment products for businesses.

5. Enforce Corporate Social Responsibility (CSR)

Case Study: South Africa’s Broad-Based Black Economic Empowerment (BBBEE)

• BBBEE policies ensure that foreign and local companies contribute meaningfully to local communities through equity transfers, community development projects, and skills training.

Proposals for Ghana:

• Mandate CSR contributions for foreign companies operating in Ghana, focusing on capacity-building and community-based projects.
• Recognize and reward foreign firms that voluntarily exceed these mandates, encouraging others to follow suit.

6. Leverage Regional Partnerships

Case Study: The African Continental Free Trade Area (AfCFTA)

• By fostering regional trade, AfCFTA encourages African countries to collaborate, creating opportunities for local businesses to scale across borders.
• Ghana, as the host country for AfCFTA’s secretariat, is well-positioned to take the lead in developing regional value chains that prioritize African businesses.

Proposals for Ghana:

• Develop programs to train local businesses on how to export under AfCFTA.
• Incentivize local firms to collaborate with counterparts in other African countries to reduce reliance on foreign multinationals.

7. Reform Taxation Policies

Case Study: Botswana’s Mining Sector

• Botswana negotiated higher royalty rates and tax contributions from foreign mining companies while investing in local diamond-cutting and polishing industries. This approach ensured more revenue stayed within the country.

Proposals for Ghana:

• Review and renegotiate contracts with foreign-owned companies in resource sectors like gold and oil to increase revenue share.
• Dedicate these additional funds to developing local industries and infrastructure.

8. Promote Shareholder Activism

Case Study: Tanzania’s Local IPO Mandates

• Tanzania mandates foreign-owned companies in strategic sectors, like telecommunications, to list shares on the local stock exchange, allowing citizens to become part-owners.
• Ghana can adopt a similar model, requiring multinationals to float a percentage of shares on the Ghana Stock Exchange (GSE).

Proposals for Ghana:

• Introduce a “Citizens’ Ownership Act” mandating local shareholding in foreign-dominated sectors.
• Offer incentives for companies that voluntarily exceed the minimum shareholding threshold.

Our Take:

Foreign investment is essential for economic growth, but Ghana must strike a balance that empowers local businesses and reduces reliance on foreign ownership. By adopting policies like those in Kenya, Nigeria, and South Africa, Ghana can ensure that its wealth benefits its citizens and builds a sustainable economy for future generations.

These initiatives, combined with education, innovation, and an entrepreneurial culture, can help Ghanaian-owned businesses like SamBoad take the lead in transforming the country’s economy.

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To reverse this trend, Ghana must create an environment where local businesses like Priority Insurance Co. Ltd, Kofikrom Pharmacy Ltd, Rokmer Pharma  Ltd just to mention few can thrive, ensuring that the wealth generated within the country benefits Ghanaians first and foremost.

This investigative piece by Samuel Kwame Boadu, highlights the need for urgent reforms and a collective effort to promote Ghanaian ownership in key sectors. With the right policies and support systems, Ghana can reclaim its economic sovereignty and build a future where local businesses flourish alongside foreign