Ghana’s investment climate has once again come under scrutiny, with the World Bank raising red flags about the country’s weak performance in its latest B-READY assessment.

The Bank revealed that Ghana’s poor score across key categories signals mounting challenges in creating an enabling environment for private sector growth. In particular, the country recorded a worrying score of 32 in Market Competition, 41 in Business Entry, and 55 in Dispute Resolution—all well below the benchmarks needed to attract consistent private capital.

According to the 2025 World Bank Economic Update on Ghana, these low scores reflect structural bottlenecks that are stifling entrepreneurship, hindering innovation, and discouraging both local and foreign investments.

At the heart of the World Bank’s findings is Ghana’s weak level of market competition. With a score of 32, Ghana lags behind regional peers in ensuring open and competitive markets. Limited competition, the Bank argues, has reduced efficiency, increased costs of doing business, and weakened incentives for firms to innovate.

For investors, the lack of competitive practices translates into limited opportunities for growth. “When markets are not open and transparent, investors shy away because they cannot guarantee fair returns,” the report emphasized. This situation undermines the government’s ambition of positioning Ghana as a business hub within West Africa.

Business Entry Barriers Remain a Major Roadblock

Another area of concern is business entry, where Ghana scored just 41. Despite government-led reforms aimed at simplifying the business registration process, bottlenecks persist. New entrepreneurs continue to face cumbersome procedures, regulatory red tape, and high start-up costs.

This discourages small and medium enterprises (SMEs)—a sector that accounts for over 80% of employment in Ghana—from scaling up and contributing meaningfully to job creation. The World Bank’s report highlighted that SMEs, which should be the backbone of Ghana’s industrial transformation, are struggling under conditions that favor larger, well-established firms.

Although Ghana fared slightly better in dispute resolution, scoring 55, the figure still falls short of global standards. The judicial process remains slow, costly, and unpredictable, which has deterred businesses from pursuing legal remedies when disputes arise.

The World Bank stressed that for Ghana to strengthen its investment climate, reforms in commercial dispute settlement are essential. Faster and more transparent arbitration processes would not only boost investor confidence but also reduce the risks associated with doing business in the country.

Education-Job Mismatch Adds to Investment Concerns

Beyond business environment issues, the report also raised alarm over a deepening mismatch between education and job creation. While Ghana has seen a rapid rise in the number of people attaining higher education, the probability of securing a high-quality job has actually declined.

The World Bank attributed this trend to two factors: the poor quality of education—as reflected in Ghana’s weak performance in standardized tests—and the sluggish pace of job creation in sectors that demand skilled labor. As a result, the returns to education are shrinking, discouraging young people and raising concerns about long-term productivity.

The crisis in the labor market is further compounded by a wave of youth migration. With limited opportunities at home, an estimated one million Ghanaian youth now live abroad. While this migration eases immediate pressure on the job market, it masks the severity of Ghana’s employment challenges.

Between 2012 and 2023, self-employment created twice as many jobs as wage employment outside of agriculture. However, sectors that traditionally absorb medium-skilled workers—such as manufacturing, construction, and domestic services—remain among the slowest growing in Ghana. This weak demand in productive sectors is undermining Ghana’s economic transformation agenda.

The World Bank concluded that Ghana needs a comprehensive growth and jobs strategy to reverse the negative trends. Such a strategy must tackle five critical areas: strengthening market competition, reducing entry barriers for businesses, reforming dispute resolution systems, improving education quality, and stimulating labor demand in productive sectors.

Failure to address these challenges, the report warned, risks locking Ghana into a cycle of jobless growth, low investor confidence, and continued outmigration of its youthful population.