Over-regulation crippling Ghanaian MSMEs – ILAPI

The Institute for Liberty and Policy Innovation (ILAPI) has expressed worry over the intricate regulatory landscape in Ghana, arguing that it is hindering the advancement, formalization, and job-generation potential of micro, small, and medium enterprises (MSMEs). Overlapping institutional responsibilities, excessive paperwork, ambiguous processes, uneven enforcement, and prolonged registration and compliance periods are all taking a heavy toll on these enterprises, according to a 2026 study by ILAPI, which surveyed 600 MSMEs in the manufacturing, information and communications technology (ICT), and tourism sectors between September 2024 and July 2025.

According to Stephen Dansu, Senior Research and Policy Analyst at ILAPI, who spoke at a press conference in Tema, MSMEs make up roughly 92% of all businesses and contribute nearly 70% to Ghana's Gross Domestic Product (GDP), making the sector crucial for the country's economic development. Dansu emphasized that the regulatory burden discourages formalization, limits business expansion, and diverts limited capital from productive investment.

ILAPI pointed out that the situation is particularly detrimental to micro and start-up businesses, which operate on limited capital and cannot easily shoulder the financial and administrative costs linked to numerous registrations, permits, licenses, and certifications. The research showed that registering a business costs an average of GH¢1,030, while permits at Metropolitan, Municipal, and District Assemblies (MMDAs) average GH¢1,275, and licenses average GH¢1,600.

In some cases, businesses reported paying as much as GH¢3,000 for licenses. ILAPI concluded that the regulatory environment is acting as a hindrance to the very businesses expected to create jobs, boost tax revenue, and stimulate economic growth. To tackle these issues, the institute recommended a thorough review of business regulations to eradicate duplication, align permits, and introduce simpler compliance requirements for smaller enterprises.

ILAPI also proposed the creation of a unified digital platform where businesses could apply for multiple licenses and approvals instead of having to deal with various regulatory institutions separately.