Ghana Takes Bold Step Towards Transparency with Beneficial Ownership Disclosure

Ghana’s Efforts to Combat Illicit Financial Flows and Promote Transparency

In a major breakthrough towards combating illicit financial flows and promoting transparency, Ghana has taken significant steps to introduce beneficial ownership disclosure in the country. The move is aimed at improving governance of the oil, gas, and mining sectors by expanding transparency beyond extractives to areas such as public procurement and contract allocation.

A Major Wake-Up Call: Peer Review and Government Response

Following a peer review by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in 2012, Ghana intensified its efforts to develop safeguards against money laundering, corruption, financing of terrorism, and organised crime. The country’s failure to meet key performance targets, including the establishment of a beneficial ownership regime, was a major wake-up call.

Pressure for Action: Panama Papers and Government Commitment

However, it wasn’t until last year that the government began to make significant progress on beneficial ownership transparency. The release of the Panama Papers in 2016 put pressure on governments worldwide to address issues related to anti-corruption and tax evasion, and Ghana’s President John Dramani Mahama publicly committed to taking action at the UK Anti-Corruption Summit in May 2016.

Building Momentum for Beneficial Ownership Transparency

Ghana Extractive Industries Transparency Initiative (GHEITI) played a key role in building momentum for beneficial ownership transparency by engaging with stakeholders, including civil society organisations, institutions, and individuals working on open governance, financial integrity, private sector accountability, and extractive sector issues. National stakeholder consultations were held to identify necessary amendments and harmonise conflicting legal issues.

Consensus and Progress

The consensus that emerged from the consultations was that the scope of beneficial ownership disclosure should be expanded beyond extractives and apply to all companies registered in Ghana. The Companies Act of 1963 was identified as the most appropriate legal instrument to establish a beneficial ownership regime, and amendments were made in August 2016 to pave the way for implementation.

Government Support and Commitment

Ghana’s new President, Nana Addo Dankwa Akufo-Addo, has declared his support for beneficial ownership disclosure, stating that it is necessary to lift the veil off public officials who hide behind cronies to amass wealth through shady public procurements. The Vice President, Alhaji Dr. Mahamudu Bawumia, has reaffirmed the government’s commitment to providing support for further progress with BO implementation.

Challenges Ahead

However, there are challenges ahead, including developing an implementation framework with clear timelines to ensure that Ghana meets the EITI 2020 deadline for operationalising BO disclosure regimes. Discussions among key stakeholders, including civil society groups, are ongoing on how the Registrar-General could be supported to come up with an implementation plan.

A Bright Future: GHEITI’s Role in Implementing Beneficial Ownership Disclosure

Ghana has made enormous progress in fulfilling its BO disclosure obligation in a short time, and GHEITI certainly takes a chunk of the credit for this breakthrough. A roundtable meeting is planned by GHEITI in the first quarter of 2017 to coordinate discussions among stakeholders and ensure that Ghana’s beneficial ownership regime is implemented effectively.