Data obtained from the Registrar General’s Department (RGD) indicates that there were 43,986 new business name and company registrations from January to June 2019. This continues the significant increase in new business registrations that started last year.
The growing zeal accounting for business operators to formally incorporate their businesses, according to the Department, is as a result of its strategy in the area of improving efficiency and customer experience which is aimed at putting in place measures to enhance the ease of doing business in the country. It also reflects the success of government as a whole towards formalizing the economy through initiatives such as digital addresses and Tax Identification Numbers (TINs).
The types of entities registered during the period include Subsidiary Business Name, Company Limited Guarantee, Partnership, Company Limited by Shares, Sole Proprietor and External Company. From January to March 2019, new entities registered stood at 22, 187 as against 21,799 registered during the second quarter of 2019. The increased number of business registrations is the continuation of a trend begun in 2018; during the last quarter of last year, new business registrations amounted to 21,136.
Although the second quarter of 2019 recorded a decrease of 388 from the first quarter total registration figure, the statistics confirm that the formal sector of the economy is growing at an increasing pace taking enterprises out of the informal sector as more players in the industry, most especially those in the “sole proprietor” category begin to register their businesses as a result of rising business confidence in the economy and a framework that more than hitherto demands formalization of the status of business enterprises..
Regarding sole proprietor category, the RGD registered a total of 31,000 new entities from January to June 2019; recording 15,442 in the first quarter as against 15,558 during the second quarter of 2019, representing an increase of 116 in this category during the second quarter.
A recent report by the International Finance Corporation (IFC) study estimates that the private sector provides nine out of 10 jobs in developing countries. The increase in number of business registrations thus gives a strong positive signal about the private sector’s contributions to job creation as well as investment mobilization.
In developed countries, data such as new business registrations are used by investors, policy making bodies and the private sector to effectively track business activities, measure business confidence and forecast economic growth going forward.
From January to December 2018, the total number of companies and businesses registered amounted to 86, 669 and the RGD is optimistic this year’s business registration figures will surpass the 2018 figures due to the removal of bottlenecks associated with the business registration procedure.
For instance, following the merger of all four starting-a-business application forms namely Tax Identification Numbers (TINs), Social Security and National Insurance Trust (SSNIT), Business Operating Permit application and Business Registration forms, this new initiative has enabled business promoters to fast track the entire business registration process.
This initiative is helping to formalize the economy as the RGD leverages on technology and digitization to improve on administrative systems by automating some processes to ease the cost and time needed to register businesses in Ghana. The automation of the application process also comes along with instant online issuance of business registration certificate following payment. Hitherto, such business registration steps had to be done at several different offices.
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