Over-regulation crippling Ghanaian MSMEs – ILAPI

The Institute for Liberty and Policy Innovation (ILAPI) has expressed worry over Ghana’s intricate regulatory system, arguing that an excessive amount of bureaucracy is impeding the expansion, formalization, and job creation potential of micro, small, and medium enterprises (MSMEs). This issue is detailed in a 2026 study conducted by ILAPI, which surveyed 600 MSMEs across the manufacturing, information and communications technology (ICT), and tourism sectors between September 2024 and July 2025.

Stephen Dansu, a Senior Research and Policy Analyst at ILAPI, made these remarks during a press conference in Tema. According to Mr Dansu, MSMEs constitute approximately 92 percent of businesses in Ghana and contribute nearly 70 percent of the nation’s Gross Domestic Product (GDP), underscoring the sector’s vital role in the country’s economic transformation.

Dansu highlighted that the regulatory burden discourages formalization, limits business growth, and diverts limited capital away from productive investments. ILAPI noted that this situation is especially detrimental to micro and startup businesses, which operate on minimal capital and cannot easily afford the financial and administrative expenses linked to multiple registrations, permits, licenses, and certifications.

The study revealed that registering a business costs an average of GH¢1,030, while permits at Metropolitan, Municipal, and District Assemblies (MMDAs) cost GH¢1,275 on average, and licenses average GH¢1,600. In some cases, businesses reportedly paid up to GH¢3,000 for licenses. ILAPI concluded that the current regulatory environment acts as a barrier to the very businesses that are expected to foster employment, increase tax revenue, and support economic growth.

The institute recommended a thorough review of business regulations to eliminate duplication, harmonize permits, and simplify compliance requirements for smaller enterprises. ILAPI also suggested creating a unified digital platform where businesses could apply for multiple licenses and approvals instead of dealing separately with multiple regulatory bodies.