Ghana exhibits considerably better conditions for the enforcement of contracts than most countries previously examined by BizCLIR. The following factors contribute to an increasingly positive environment for commercial dispute resolution in Ghana:
· The development of a new Commercial Court in recent years, as well as a number of “fast-track” high courts
· The emergence of alternative dispute resolution (ADR) mechanisms, including both arbitration and mediation
· A well-established community of valuation and accounting professionals
· A relatively well functioning system of bailiffs
· A growing sense that corruption in public institutions, including courts, has been exposed and will be less tolerated in the future.
Throughout this diagnostic, a relatively positive view of the courts, and indeed Ghana’s rule of law generally, unfolded. Lawyers, bankers, and business owners agreed that there is, for the most part, respect for the courts, and that resolution of cases – with the pronounced exception of land disputes – usually takes place in a reasonable amount of time. Ghana’s strengthening sense that commercial transactions will be governed by the rule of law cannot be underestimated as a critical factor toward reducing risk and as a comparative advantage for doing business in Ghana. In short, where lenders and investors believe that the contracts they make are enforceable in a fair and timely fashion, their sense of risk diminishes and their willingness to lend or invest concurrently increases. Moreover, when outsiders believe that their investments will not be decimated by official corruption, they are more likely to seek out Ghana’s opportunities and markets.
Nonetheless, with respect to Ghana’s agricultural sector, certain central concerns remain:
· Ghana’s judiciary appears to be highly oriented toward Accra, with little public information available about law, courts, and dispute resolution services outside of the capital city. Resources for commercial dispute resolution in particular do not appear to be directed at regions where the economy is significantly driven by agricultural enterprises.
· Ghana lacks formal mechanisms for quick enforcement of agricultural contracts, such as a workable secured transactions regime or expedited legal proceedings for enforcement of contracts involving perishable goods. Nor has arbitration been broached as a mechanism for quick, local resolution of disputes in the agricultural sector.
· Small farmers and FBOs remain unaccustomed to honoring, and even often unwilling to honor, written contracts for the purchase of agricultural products, thus increasing the risk of doing business in the sector.
· There is a perception among lenders that small borrowers will not be held accountable by courts for their flouting of contracts, thereby rendering lenders and other institutions unwilling to do business with them.
· Lawyers and bankers are not specifically trained in issues directly pertaining to agriculture, thus resulting in a contracting culture that is not conducive toward transactions in that sector.
In the category of Enforcing Contracts, the World Bank ranks Ghana 50th out of 181 countries surveyed in Doing Business 2009. This ranking is unchanged from the previous year, and Ghana fares quite well, in fact, relative to the rest of Africa. For the purposes of AgCLIR, although Enforcing Contracts is one of the country’s stronger areas of review, continued commitment to strengthening courts and ADR, particularly beyond the larger cities, is necessary. There must also be a continued emphasis to smaller, less-educated constituencies about the importance of making and honoring contracts, along with a creative approach to improving perceptions of the value of contracts in the agricultural sector.
