Small and medium-sized enterprises in Ghana are losing at least 30% of their startup capital to regulatory compliance, a situation that threatens job creation and business growth, according to Bismark Kwofie, Executive Director of the Institute for Liberty and Policy Innovation (ILAPI). 

“In Ghana, if you have about 100,000 cedis as capital, you should expect about 20 to 30% to go into business regulation alone,” Mr Kwofie told the media at a  recent training workshop focused on navigating Ghana’s regulatory environment.

“It also means that about three to five people will lose their jobs or won’t be employed. The more you grow the business, the more the requirements.”

The workshop, organised by ILAPI and Enterprise Bureau aimed to equip over 80 entrepreneurs with tools to overcome bureaucratic bottlenecks and advocate for a more enabling environment for business growth.

Participants explored the link between regulatory overload and economic stagnation, especially for startups and informal businesses seeking formalisation.

Joining the conversation was Juan Pena, General Secretary of the Foundation for Economic Advancement, a Spain-based think tank.

Drawing parallels between Ghana and Spain, Mr Pena warned that excessive regulation was a shared obstacle to innovation and entrepreneurship.

“What I have seen so far is that there is a lot of regulation. I don't know if it can be considered overregulation... so many things have to be complied with by small business owners just to start a business,” he observed.

Mr Pena proposed a shift toward more flexible systems such as Positive Silence and Responsible Declaration models that allowed businesses to begin operations after truthfully meeting requirements, without waiting for formal long beurocratic approval. Dishonest declarations would still be subject to penalties, he caveated. 

“Ghana would really progress in a faster way if most of those regulations were either discarded when possible or at least changed to a system of what we call Positive Silence - that means you ask the administration for a certain thing, and if they take longer than X amount of time, then it is granted and Responsible Declarations,” he explained.

The workshop underscored the urgent need for regulatory reform to unlock Ghana’s entrepreneurial potential and reduce the cost of compliance for emerging businesses.