Where the Money Is At


1.  Get a government contract through a non-competitive process.  If you can persuade the right people to manage an essential economic activity, then it’s a near certainty that you will make buckets of money.  For instance, I understand that one of the few Lamborghini owners in Accra takes a small piece of every container that is unloaded in the Port of Tema.  I believe his company is responsible for moving shipping containers on and off cargo ships.

According to one friend, the primary risk for any business based on relationships is that a rival or new entrant can pay more for these relationships and take what you have worked hard to build right from under you.

2. Real estate development is a high risk, high reward business that largely targets wealthy buyers.  As I mentioned in a previous post, there are a limited number of places for investors to hold their cash.  Much of people’s savings are invested in real estate because banks do not offer any protection and the stock market is small.

Over 12-18 months, buyers will pay for their entire property in stages and without a mortgage.  (Banks charge usury rates that make mortgages unappealing.)  For instance, you might pay 25 percent as a deposit, then 25 percent when the foundation is laid, 25 percent when the external shell is completed, and the final 25 percent when the keys are handed over.  Some residential real estate developers will budget a profit into the price and hope that building cost inflation and project management will ensure that they can eke out a profit.  Other developers pool funds together and build on “spec” or speculation that someone will buy the house or apartment at completion.

A few risks leap out at me.  First, you must make sure you can build on schedule and under budget.  Given Ghanaian work habits, you have have to be especially vigilant that they can work on schedule.  Second, you must properly assess demand and pricing.  The La Beach Towers located near Labadi Beach and starting at over $600,000 seem at risk of not being bought up.  Third, you have to buy land with clear title.  According to my lawyer, legal disputes involving the courts can last up to 10 years.

Nonetheless, if you can provide a product that the market wants, then there is the potential for  making excess profits.

3.  Trading and retail: one of the primary economic activities is to buy something from outside, e.g.China, and sell it in Ghana.  Many items in Ghana are 50 to 100 percent higher  than they are in the US because someone has taken the risk of buying, shipping, clearing customs, and finally selling that good in Ghana.  The cost of capital or the cost of borrowing is high and buyer are paying a premium for goods that cannot be found locally.  Anecdotally, I’ve heard that several market women who sell — clothes, electronics — at the Makola Market are quite wealthy.  If you are a non-Ghanaian, then you will need to provide GIPC proof that you have at least $300,000 in goods or capital in order to establish a trading business in Ghana.

4.  Illegal stuff.  One thing I have learned is that my neighborhood, East Legon, is known for MPs (Members of Parliament), retired footballers, and drug dealers.  Some people in East Legon live a conspicuous lifestyle that does not make sense unless you consider they are doing something illicit.  The taxi drivers I ride around with think those “young boys” are either involved in 419 (email scams) or cocaine.

Let me be clear.  I do not encourage anyone to do illegal activities because it’s ILLEGAL! 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: