OVERVIEW OF MERGERS AND ACQUISITIONS IN GHANA

Mergers and acquisitions (M&A) are pivotal in shaping the business landscape of any country and Ghana is no exception. The West African nation has seen a variety of M&A activities across different sectors, driven by regulatory requirements, strategic business goals and the dynamic nature of its economy. 

REGULATORY FRAMEWORK

In Ghana, mergers and acquisitions are regulated by industry-specific laws, with the Bank of Ghana (BoG) overseeing transactions involving banks and specialized deposit-taking institutions. The BoG’s directives ensure these activities support financial stability and economic goals by detailing the approval process, criteria and required documentation. Prior approval from the BoG is mandatory for any bank merger or acquisition which involves a thorough evaluation of the entities’ financial health, management capabilities and strategic intentions to ensure the resulting entity is robust and beneficial to the banking sector and economy.

NOTABLE MERGERS

Ghana has seen notable mergers and acquisitions that have significantly impacted its market. In 2017, Bharti Airtel merged with Millicom’s Tigo to form AirtelTigo, becoming the country’s second-largest mobile operator and enhancing service efficiency. In 2011, Ecobank acquired a substantial stake in The Trust Bank to meet recapitalization requirements, bolstering its position and ensuring regulatory compliance. Additionally, Fidelity Bank’s acquisition of ProCredit Savings and Loans in 2014 expanded its SME services which leveraged ProCredit’s expertise to grow its customer base and service offerings.

SECTOR SPECIFIC CONSIDERATIONS

M&A activities in Ghana vary by sector due to specific regulations. In the upstream oil and gas sector, industry-specific rules address resource ownership, environmental impacts and local content requirements to ensure sustainable development. The telecommunications sector is regulated by the National Communications Authority (NCA) to prevent anti-competitive practices and promote fair competition and consumer protection. In mining, the Minerals Commission oversees transactions to ensure alignment with mineral development policies, including environmental sustainability, community impact and compliance with mining laws.

LOCAL CONTENT REQUIREMENTS

Local content requirements significantly influence mergers and acquisitions in Ghana, particularly in the petroleum, mining and telecommunications sectors. These regulations mandate that foreign companies form joint ventures with local firms, ensuring local participation and equity. In the petroleum sector, non-indigenous companies must grant at least 10% equity to Ghanaian partners, while the mining sector requires sourcing goods and services locally. The telecommunications sector also enforces local content guidelines to maintain local involvement. These requirements aim to foster local economic development and technology transfer but can pose compliance challenges for foreign companies.

KEY INSIGHTS

Mergers and acquisitions in Ghana are regulated by industry-specific laws, with significant oversight from bodies like the Bank of Ghana. Local content requirements mandate partnerships with local firms, especially in the petroleum and mining sectors. Sector-specific challenges, stringent compliance and regulatory uncertainties add complexity to the M&A process. Notable mergers such as Airtel and Tigo, Ecobank and The Trust Bank, Fidelity Bank and ProCredit have enhanced market competitiveness and service delivery.