On 25th March 2019, the American Chamber of Commerce, Ghana (AMCHAM) and the Ghana Association of Restructuring and Insolvency Advisors (GARIA) organized a symposium with the Speaker of Ghana’s Parliament, Professor Aaron Michael Oquaye at the La Palm Royal Beach Hotel in Accra. The symposium was on the theme “Improving the Current Legal Framework to Enhance the Ease of Doing Business” which aimed at fostering public dialogue on the new Companies Bill which is currently before Parliament. The symposium had in attendance the Majority Leader of Parliament, Hon. Osei Kyei-Mensa-Bonsu; Minority Leader of Parliament, Hon. Haruna Iddrisu; former Supreme Court Judge, Justice S. K. Date-Bah; President of AMCHAM, Mr. Joe Mensah; and the President of GARIA, Mr. Felix Addo.
Opening Remarks by Mr. Joe Mensah, President, AMCHAM
In his opening remarks, Mr. Joe Mensah highlighted the contribution of American companies to the various sectors of the Ghanaian economy such as agriculture, technology, and employment among others. According to him, a study conducted by PricewaterhouseCoopers (PwC) in 2015 revealed that American companies in Ghana had invested about $13 billion in the Ghanaian economy and about $300 million on corporate social responsibility (CSR) programmes.
He, however, bemoaned Ghana’s 10th place ranking on the Rand Merchant Bank’s “Where to Invest in Africa Report” and stressed the need for collaboration between Parliament and the business community to create a conducive environment to enhance the ease of doing business as well as attract Ghanaians in the diaspora to invest in the country.
Address on Existing Company Legislation by Justice S. K. Date-Bah
Justice S. K. Date-Bah, who chaired the symposium, gave a historical overview of company legislation in Ghana from pre-independence to the enactment of the 1963 Companies Code drafted by Professor Gower and the recent Business Law Reforms which started in 2008 to review and amend the 1963 Companies Code.
According to Prof. Date-Bah, Ghana’s new Companies’ Bill remains predominantly Gower’s original Act but new concepts have been introduced. The new concepts include: simplifying the registration of companies, complete abrogation of the doctrine of ultra vires, special resolutions in major transactions, buy‐out for dissenting shareholders, enabling of electronic mode of exercising powers, the use of updated accounting terminologies (such as financial statements), the implementation of the office of the Registrar of Companies and the need for the office of the Registrar of Companies to monitor the Companies law and make proposals to government for reforms when necessary.
He concluded that the enactment of the Companies bill in 2019 will help ease and simplify the process of doing business as well as become an important step in restructuring Ghana’s legal regime for business growth and development.
Address on Corporate Insolvency Bill by Mr. Felix Addo, President, GARIA
Mr. Felix Addo provided an overview of the new Corporate Insolvency Bill which is part of the Business Law Reform Committee’s work in 2008 that is currently before Parliament. Mr. Addo stated that under the proposed Insolvency Bill, a Division of Insolvency which will handle all issues related to insolvency and restructuring will be created under the Office of the Autonomous Registrar.
Also, according to Mr. Addo, the new Insolvency Bill makes provision for restructuring or administration (where a distressed company can be restructured under Chapter 11 of the Bankruptcy Code: thus a rescue culture for distressed companies in the country), post-commencement financing for distressed companies, a stay of trading imposed on insolvent companies that are ready to start administrative processes, cross border transactions and a regulatory regime for insolvency practitioners.
Remarks by the Minority Leader of Parliament, Hon. Haruna Idrissu
The Minority Leader, Hon. Haruna Idrissu remarked that the revised Companies Bill is an important document since it impacts on the ease of doing business in the country and assured the business community of the full support of the Parliament of Ghana to pass the bill into law to make Ghana a better place to do business.
On the ease of doing business, he noted that the country needs to improve as in some instances the country’s respectability and enforcement of contracts suffer during political transitions. He also stressed the need for the Customs Division of the Ghana Revenue Authority to work 24 hours, as well as the need for every government institution to create an enabling environment for the private sector in order to enhance the ease of doing business in the country.
He lamented the high transaction cost -including taxation- and the time of doing business in Ghana. He also noted that insolvency legislation would have been timely in the wake of the country’s banking crisis to help secure, protect and allow the survival of financial institutions.
He concluded that the country needed to address two key issues: first is the synergy between the Registrar General, the Minister of Finance and taxation as well as the extent to which the government gets its due from corporate entities; second is the need to clearly define the individuals behind corporate entities in order to deepen transparency and accountability to help combat corruption. This is because there are instances where corporate entities register in tax havens and due to privity of contracts, these companies are not identified yet they benefit unknown persons.
Remarks by the Majority Leader of Parliament, Hon. Osei Kyei-Mensah-Bonsu
Hon. Osei Kyei-Mensah-Bonsu in his address stated that the business environment in developing countries is often challenged with non-transparent, time consuming and costly bureaucratic procedures, outdated laws and regulations for business transaction, inconsistent legal frameworks, unstable and unpredictable weak infrastructure and policy as well as high levels of corruption which increase the cost of doing business and subsequently affects enterprise development, economic growth, employment and poverty reduction efforts.
He noted that in order to improve the business environment in the country, it is necessary to improve infrastructure and the legal and fiscal regimes. Concerning infrastructure, he mentioned that it is important to improve critical factors such as the road networks, rail network, the cost of delivering electricity to businesses, water, telephone, and efficient ports, and import duties. He expressed concerns about Ghana’s high import duties which does not encourage businesses noting that over the past five years the country’s port activities have only increased by 4% whereas activities in the port of Lome in Togo has increased by 300%.
About the legal regime, he noted that a number of amendments (about 520) have been proposed concerning the new Companies’ Bill and Parliament will work to facilitate the passing of the bill. He also mentioned that Parliament is working on a number of bills such as the Right to Information Bill (RTI), the Procurement Act, Public Financial Management Act, Electronic Business Transaction Act, and Electronic Payment Systems Act.
According to him, the country’s fiscal regime – GDP growth rate, exchange rate, inflation and interest rate among others- is in good shape but needs to be improved in order to attract investments.
He concluded by emphasizing the need for the country to strengthen security, increase the fight against corruption, revise tax laws and collaborate with the business community to protect businesses and create an enabling environment for businesses to thrive.
Remarks by Ghana’s Speaker Parliament, Professor Aaron Michael Oquaye
The Speaker of Parliament, Professor Aaron Michael Oquaye, the keynote speaker for the event, expressed his displeasure at the corrupt practices of some businesses and the recent crisis in the country’s banking sector and called for the establishment of systems and proper accounting practices as well as strong laws to regulate companies in the country. According to the Speaker, the ease of doing business is often associated with the simplicity of doing business without the necessary checks and balances being in place. He, therefore, called on all stakeholders to ensure that businesses are conducted the right way.
With regards to the new Companies Bill, he stated that although there have been a number of suggestions from stakeholders, Parliament would welcome the suggestions of the business community. He noted that Ghana has made progress in terms of dialogue between government agencies, stakeholders and the business community but the politicization of issues in the country is a major problem. He, therefore, called for the establishment of independent institutions to select regulators in order to make the regulatory process completely independent from politics.
He concluded that the laws of the country need to be strengthened in order to curb the political, social, cultural and legal factors that hinder the successful operation of businesses.