Ghana’s Startup Ecosystem is gradually improving, making it more conducive for startup businesses to thrive, especially in the major cities. According to the Global Startup Ecosystem Index 2021 report, Ghana has jumped 4 spots to rank 81st globally. In 2019, Ghana’s startup ecosystem ranked 75th, however, it dropped to 85th in 2020 before picking up this year.
Regionally, Ghana ranks 2nd in Western Africa and 7th in Africa. Moreover, after a jump of 70 spots, Accra is the highest ranked city in Ghana and 281st globally. The report describes Accra as an active city housing a number of industries, including Foodtech and Fintech Startup.
Ecosystem Overview
The report highlights that Ghana’s startup ecosystem is constantly evolving and receiving direct foreign investment from various organizations, including the Ghana Start-Up capital fund, the Ghana-India Kofi Annan Centre of Excellence in ICT, and 3 Day Startup. Meltwater Entrepreneurial School of Technology (MEST) is also active in its support of the local ecosystem.
“The Ghanaian startup ecosystem has made strides in mobile finance and there is a rising trend of female entrepreneurship. There are also a number of startup networks, like the Ghana Hubs Network, that help prioritize startup oriented public sector policies”.
Despite the significant strides made in creating an enabling environment for startups, there are still challenges that must be addressed to encourage business development in the country as highlighted by the report.
“…the main challenge for this ecosystem is a lack of infrastructure and limited resources for startups due to a lack of investment options. Ghana needs to focus on stimulating Accra’s ecosystem and encouraging the rise of another startup hub in another city”.
Notable Startups and Ecosystem Champions
Some Notable Startups and Ecosystem Champions in Ghana include Farmerline and PayLock located in Accra, and AcquahMeyer Drone Tech based in Kumasi.
Farmerline’s mobile-based service increases crop quality and yield to raise farmer income, increase farmer autonomy, and address threats to food security. On the other hand, PayLock allows businesses to both hire and pay freelancers on their platform. Also, AcquahMeyer Drone Tech uses drones to provide total crop pest and disease management.
The Startup Ecosystem Index
The report considers a startup as any business that applies an innovative solution which validates a scalable economical model. However, entities without a unique innovation, such as non-technological service providers, digital forums built on white-labeled existing technology, and local directories such as simple lists of real estate or jobs listings were not taken into consideration for the Index.
The Startup Ecosystem Index is a summation of 3 scores measuring Quantity, Quality, and Business environment. Nevertheless, Business environment is a major factor that affects the ranking since it focuses on general indicators connected to infrastructure, ecosystem critical mass, and the ability to freely operate as a startup founder in each country. The Business Environment score is mainly focused on parameters at the country level, since national infrastructure, policies, and legislation generally affects all cities within a country.
Among the elements taken into account for the calculation of the Business score in each ecosystem are: Ease of Doing Business and registering companies, Internet Speed, Internet Freedom, R&D investment. It also considers the availability of various technological services (payment portals, ride-sharing apps, cryptocurrency).
Ease of doing business
Whist Ghana is making progress in supporting innovative startups, a lot needs to be done to make it easy to do business in the country. According to the World Bank’s 2020 Doing Business report, Ghana ranks 118th out 190 economies.
The areas considered by the World Bank include starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, employing workers, and contracting with the government.
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