Resort to use of Alternate Dispute Resolution - Businesses urged
The President of the Ghana National Chamber of Commerce (GNCC), Nana Appiagyei Dankawoso I, has advised businesses in the country to resort to the use of Alternate Dispute Resolution (ADR) to resolve their differences instead of litigating in court.
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He explained that although ADR was informal, inexpensive, and less time-consuming, industry players still preferred to litigate over trivial issues which could easily be resolved by arbitrators and mediators.
ADR is the process where both parties involved in a conflict or disagreement resort to the use of mediation or arbitration to settle their dispute outside the courtroom.
Nana Dankawoso I told the GRAPHIC BUSINESS on the sidelines of a workshop in Accra that although the business community was urging the commercial court in the country to improve its speed for settling issues, it was incumbent for businesses to rely on the ADR process to solve their conflicts.
Workshop
The workshop was organised by the International Finance Corporation (IFC) of the World Bank Group in partnership with the Ghana Chamber of Commerce (GNCC).
Nana Dankawoso said the chamber had been engaging key stakeholders in challenges facing the private sector and exploring possible areas of collaborations to improve the competitiveness of the business environment.
Participants, including members of the business community, foreign investors, and policy makers were taken through a new study; the Doing Business 2017 report, which was released last week.
According to the report, globally, Ghana stands at 155 in the ranking of 190 economies on the ease of resolving insolvency through court proceedings.
Data collected by the study indicates that resolving insolvency takes 1.9 years on average and costs 22.0 per cent of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale. The average recovery rate is 23.7 cents on the dollar.
Ghana ranked high
The report also showed that Ghana was placed at position 108 out of 190 countries surveyed in the Overall Ranking of Ease of Doing Business - an improvement from 111 in the previous report.
In the sub-Saharan Africa sub-region, Ghana ranked in the Top 10, coming 9th, out of the 47 countries ranked in the region.
This is evidence that the government is pursuing active reforms to ensure the Ease of Doing Business in Ghana. The Top 10 countries in the region are Mauritius, Rwanda, South Africa, Botswana, Kenya, Seychelles, Zambia and Lesotho.
According to Nana Dankawoso, this finding is welcoming particularly at a time that some key economic indicators such as inflation, interest rate, exchange rate and the Gross Domestic Product (GDP) growth have struggled to perform creditably over the years.
In the “Trading Across Borders” Indicator, one of the 10 indicators measured, Ghana improved by 13 places, coming in at 154 from a previous ranking of 167.
This indicator showed that the country recorded the most improvement in the ease of doing business reforms, compared with the other nine indicators, with the next improvement achieved by the “Resolving Insolvency” Indicator; an improvement of three places.
The “Trading Across Borders” rankings measure the time and cost (excluding tariffs) associated with three sets of procedures: documentary in the ease of doing business reforms, compared with the other nine indicators, with the next improvement achieved by the “Resolving Insolvency” Indicator; an improvement of three places.
The “Trading Across Borders” rankings measure the time and cost (excluding tariffs) associated with three sets of procedures: documentary compliance, border compliance and domestic transport; within the overall process of exporting or importing a shipment of goods – One of the Key Performance Indicators (KPI) adopted by the Ghana National Single Window Programme.
"Ghana made trading across borders easier by removing the mandatory pre-arrival assessment inspection at origin for imported products," the annual report stated.
According to the report, "Ghana is among the economies that heavily invested in electronic systems to facilitate trade. In September 2015, it implemented the first phase of its national single window and ended the contract with Destination Inspection Companies for its Pre-Arrival Assessment programme.
Index rankings
The Ease of Doing Business Index ranks economies from one to 190. For each economy, the ranking is calculated as the simple average of the percentile rankings on each of the 10 topics included in the index in Doing Business 2017.
The topics were: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
The World Bank Group’s annual ease of doing business report observed that sub-Saharan Africa economies carried out a record number of reforms in the past year to improve the business climate for local entrepreneurs.
The region’s economies reformed most in the areas of Resolving Insolvency with 18 reforms and Starting a Business,15. Nigeria, Rwanda and South Africa, for example, made starting a business easier by introducing or improving online portals.