IIEffective Insolvency and Creditor Rights Systems
According to a 2005 Memorandum of Economic and Financial Policies of the Government of Ghana, published as part of that year's International Monetary Fund Article IV Consultation report, the Ghanaian authorities planned to pass an Insolvency Bill and Companies Code that would address the lack of clarity in law regarding the rights of both creditors and borrowers. According to the U.S. Department of Commerce's 2009 Country Commercial Guide, however, no such legislation has yet been passed. Ghana has no formal law on bankruptcy. The Bodies Corporate (Official Liquidations) Act constitutes Ghana's insolvency regime, and the Companies Code specifies procedures for debt collection. The International Bank for Reconstruction and Development and the World Bank published a 2009 "Doing Business" evaluation of Ghana. With regard to closing a business, it was reported that Ghana does somewhat better than the regional average but significantly underperforms in comparison with the average experienced by members of the Organization for Economic Cooperation and Development (OECD). However, there is insufficient information publicly available as to Ghana's compliance with the Principles and Guidelines for Effective Insolvency and Creditor Rights Systems developed by the World Bank.
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IDInternational Financial Reporting Standards
A 2004 assessment of the accounting and auditing environment in Ghana conducted by the World Bank noted that the regulation of accounting practices was somewhat weak and recommended strengthening the statutory framework, enforcement mechanisms, and professional education. It also recommended adoption of International Financial Reporting Standards (IFRSs) without any modifications, in place of the existing Ghana National Accounting Standards (GASs). The World Bank pointed out that GASs are based on a mid-1990s version of IFRSs (then International Accounting Standards, or IASs) and hence are outdated and differ significantly from their international counterparts. Other major recommendations included the creation of an independent oversight body responsible for the process of adoption and enforcement of accounting and auditing standards based on international equivalents for public interest entities, and developing simplified reporting requirements for the Small and Medium-size Enterprises (SMEs). In line with the World Bank recommendations, in January 2007, Mr. Kwadwo Baah-Wiredu, the then acting Minister of Finance and Economic Planning of Ghana, formally announced the launching of Ghana's adoption of IFRSs and the subsequent replacement of the local GASs. As noted in a 2007 United Nations Conference on Trade and Development report, consistent with a phased approach towards adoption of international standards, by December 2007 IFRSs were expected to become applicable for all listed companies, government business enterprises, banks, insurance companies, securities brokers, pension funds, and public utilities. SMEs, State-owned Enterprises, Ministries, Departments and Agencies were given an additional two-year transition period and were required to apply IFRSs by 2009. As of April 2009, there existed no further publically available information on the actual progress of IFRS adoption in Ghana.
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ENPrinciples of Corporate Governance
According to the World Bank's 2005 Report on the Observance of Standards and Codes (ROSC) on corporate governance, Ghana's capital market development has shown potential for improvement. The World Bank found that the majority of the Organization for Cooperation and Development's Corporate Governance Principles are "partially observed" indicating that while the legal and regulatory framework complies with the principles, practices and enforcement diverge. Challenges remain because of its weak institutional foundation as well as capacity and enforcement gaps. The 2005 World Bank ROSC asserted that improvements in Ghana's capital markets are more dependent on increasing the institutional capacity of the regulators, administration, and judiciary than on reforming the legal framework. Recommendations to improve corporate governance included upgrading the institutional framework, continuing to review and modernize legislation, spreading awareness of the importance of corporate governance, establishing active and independent boards, and improving disclosure.
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IDInternational Standards on Auditing
According to an assessment of the accounting and auditing environment in Ghana conducted by the World Bank in 2004, although Ghana National Standards on Auditing (NSAs) are based on the International Standards on Auditing (ISAs), they are "outdated" and not in line with current international standards. Furthermore, the assessment pointed out that, with the exception of the banking sector, compliance with the existing NSAs was weak, due to inadequate enforcement mechanisms. One of the World Bank's major recommendations was to call for the creation of an independent oversight body to be responsible for the process of adoption and enforcement of accounting and auditing standards based on international equivalents for public interest entities. The World Bank also recommended developing simplified reporting requirements for Small and Medium-size Enterprises. In a 2007 speech by then acting Minister of Finance and Economic Planning of Ghana Kwadwo Baah Wiredu, the Minister pointed out that, as envisioned in the Strategic Plan developed by the Institute of Chartered Accountants of Ghana (ICAG), International Standards on Auditing were expected to be adopted in full by 2009. However, as of April 2009, there is no further publically available information as to progress towards achieving this goal.
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IDAnti-Money Laundering/Combating Terrorist Financing Standard
According to two reports by the IMF in 2003 and 2005, the lack of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) legislation in Ghana affected both its reputation and its ability to fight abuse of its financial system by money launderers. A 2009 report by the U.S. Department of State (DoS) notes extensive progress and reform since the IMF reports. In 2008, Ghana passed its Anti-Money Laundering Act, which calls for the establishment of a Financial Intelligence Unit, which will be called the Financial Intelligence Centre, and is expected to be overseen by the National Security Council. On July 18, 2008, the Parliament passed the Anti-Terrorism Bill as required by the United Nations Security Council Resolution (UNSCR) 1373. Further, the Bank of Ghana has circulated the list of individuals and entities on the UNSCR's 1267 Sanctions Committee and promulgated regulations requiring declaration of large international money transfers. According to the 2009 DoS report, Ghana will undergo a mutual evaluation with the Inter-Governmental Action Group Against Money Laundering and Terrorist Financing in West Africa, which is a regional Financial Action Task Force (FATF). The FATF, in its 2007-2008 Annual Report, named Ghana as one of the jurisdictions that have undertaken to implement the FATF's 40+9 recommendations.
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IICore Principles for Systemically Important Payment Systems
Information provided on the Bank of Ghana (BoG) website describes the Ghana Interbank Settlement (GIS) system as the country's systemically important payment system and notes that the system complies with the Committee on Payment and Settlement Systems (CPSS) Core Principles for payment systems. Besides the above statement from the BoG, there is no other publicly available source that corroborates this information or explicitly addresses Ghana's compliance with the CPSS' Core Principles for Systemically Important Payment Systems. However, a 2008 report by the World Bank on payment systems worldwide notes that the country has made significant strides in its payment system's infrastructure and regulatory framework. The main laws governing payment instruments, institutions, and clearing and settlement systems are the Bank of Ghana Act of 2002, the Payment Systems Act of 2003, and the Bills of Exchange Act of 1961. A 2007 International Monetary Fund (IMF) report on Ghana observes that the country has embarked on a financial sector development plan with IMF assistance, which includes an upgrade of its payments system infrastructure. The reform encompasses using the latest technology, making ATMs interoperable, enabling the electronic processing of payments and the use of "smart cards", and making the payments system more widespread and accessible to rural areas.
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