TISO RESEARCH REPORT 2026 - WHEN RULES BECOME ROADBLOCKS
Abstract
Ghana's Micro, Small, and Medium Enterprises (MSMEs) are widely regarded as the backbone of the national economy, yet they continue to operate within a business regulatory environment that is costly, fragmented, and slow to navigate. This report, commissioned by the Institute for Liberty and Policy Innovation (ILAPI) under the TISO project, examines the red tape and regulatory barriers confronting MSMEs in the Information and Communications Technology (ICT), Manufacturing, and Hospitality sectors, and proposes evidence-based policy solutions to ease business entry, compliance, and growth.
The findings reveal a business regulatory regime that imposes significant bureaucratic and financial strain on entrepreneurs. A manufacturing business requires more than 13 separate regulatory certificates, permits, and licenses, each administered by different institutions with its own procedures and timelines. Only 42.7% of surveyed businesses held a valid operating license at the time of the study, and 57.3% were found to be operating without one, largely due to delays, cost, and procedural complexity rather than unwillingness to comply. The majority of businesses (40.8%) waited more than a month to receive the business entry certificate beyond the stipulated 14 working-day period, while a quarter spent between 5% and 10% of business revenue on regulatory compliance, and a significant number of MSMEs spent upward to 30%. A particularly striking finding is the extent of reliance on informal intermediaries, or "Goro boys," used by 84% of respondents to navigate registration processes. This shows a clear signal that official channels are too slow, opaque, or costly to use directly.
The study also identifies stark sectoral and gender disparities: women-owned businesses are concentrated in the Hospitality sector and are underrepresented in ICT and Manufacturing, while ICT businesses reported the lowest levels of licensing compliance among the three sectors studied. Drawing on comparative lessons from the United States, China, and Germany, the report recommends comprehensive regulatory reform to streamline and harmonize licensing procedures, full digitization of registration and renewal systems to reduce reliance on middlemen, targeted support for MSME digital and financial literacy, and the development of crisis-responsive and export-promotion mechanisms tailored to Ghana's MSME sector. Collectively, these reforms are intended to reduce the cost and complexity of formal business compliance, curb informality, and unlock the job-creating potential of Ghana's entrepreneurial economy. The key point, however, is that regulatory reform should not mean eliminating legitimate protections. Ghana needs regulations that protect consumers, workers, the environment and property rights. The objective should be to eliminate regulations that are duplicative, unnecessarily costly, outdated, disproportionate or unnecessarily restrictive.
The findings reveal a business regulatory regime that imposes significant bureaucratic and financial strain on entrepreneurs. A manufacturing business requires more than 13 separate regulatory certificates, permits, and licenses, each administered by different institutions with its own procedures and timelines. Only 42.7% of surveyed businesses held a valid operating license at the time of the study, and 57.3% were found to be operating without one, largely due to delays, cost, and procedural complexity rather than unwillingness to comply. The majority of businesses (40.8%) waited more than a month to receive the business entry certificate beyond the stipulated 14 working-day period, while a quarter spent between 5% and 10% of business revenue on regulatory compliance, and a significant number of MSMEs spent upward to 30%. A particularly striking finding is the extent of reliance on informal intermediaries, or "Goro boys," used by 84% of respondents to navigate registration processes. This shows a clear signal that official channels are too slow, opaque, or costly to use directly.
The study also identifies stark sectoral and gender disparities: women-owned businesses are concentrated in the Hospitality sector and are underrepresented in ICT and Manufacturing, while ICT businesses reported the lowest levels of licensing compliance among the three sectors studied. Drawing on comparative lessons from the United States, China, and Germany, the report recommends comprehensive regulatory reform to streamline and harmonize licensing procedures, full digitization of registration and renewal systems to reduce reliance on middlemen, targeted support for MSME digital and financial literacy, and the development of crisis-responsive and export-promotion mechanisms tailored to Ghana's MSME sector. Collectively, these reforms are intended to reduce the cost and complexity of formal business compliance, curb informality, and unlock the job-creating potential of Ghana's entrepreneurial economy. The key point, however, is that regulatory reform should not mean eliminating legitimate protections. Ghana needs regulations that protect consumers, workers, the environment and property rights. The objective should be to eliminate regulations that are duplicative, unnecessarily costly, outdated, disproportionate or unnecessarily restrictive.
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