Shortage of clients impedes industry growth in Ghana: member Alfred Ayer comments
Local accountancy firms in Ghana are facing significant challenges due to a lack of clients and competitive customer demand.
The Ghana Stock Exchange lists only 37 companies, and the majority of businesses are small and medium-sized enterprises (SMEs), which comprise 90% of the market but show low demand for audit reports due to insufficient documentation and low incomes. This low demand has led to underpricing of services, prompting the Institute of Chartered Accountants Ghana to set minimum fees starting January 2024.
Market expansion is vital
Alfred Ayer, managing partner at Accra-based MGI O.A.K Chartered Accountants, joined a recent discussion with the IAB (International Accounting Bulletin), explaining that in order to thrive, Ghanaian firms need new markets and a larger client pool. The African Continental Free Trade Area (AfCFTA) was expected to accelerate growth by creating a borderless market, but progress has been slow. Alfred points out that the agreement needs to be refocused on critical empowerment interventions aimed at the youth and at women.
“The expected accelerated growth has not been achieved as trade in most African nations is still skewed in favour of men as a result of social inequalities and cultural practices. The unemployment in most nations in Africa, and lack of access to credit, is forcing the youth to settle for entrepreneurship in the informal sector.”
Alfred also noted that the protocols required to boost core custom unions and free trade agreements, high cost of trading among member countries, and steep tariffs, remain challenges to the effective implementation of the agreement.
In addition to all of this, the accounting industry is experiencing unprecedented challenges, including fee pressure, client demand, and staff recruitment and retention. Many accountants work at auditing firms to gain necessary experience and then leave for better-paying jobs.
Positive growth continues
Despite these challenges, Ghana's economy is performing well. Inflation has decreased significantly, and GDP growth is expected to be 5.1% in 2024. This economic growth may unlock client budgets, offering hope to local accountancy firms.
Overall, the Ghanaian accountancy sector must navigate these obstacles by focusing on skills development, adapting to technological advancements, and leveraging economic growth opportunities to attract and retain clients and talent.
To read the full article in the May edition of the IAB, members can click here (login to the MGI Worldwide member portal will be required).
For more information about our contributing member firm MGI O.A.K Chartered Accountants visit the firm profile page or website.
MGI Worldwide is a top 20 ranked global accounting network and association with over 8,000 professionals, accountants and tax experts in some 400 locations in almost 100 countries around the world.