THE GHANAIAN ECONOMY; STATE OF MERGERS AND ACQUISITIONS AND ITS EFFECT ON THE ECONOMY

INTRODUCTION

Following the disruptions of the COVID-19 pandemic, Ghana is recovering with an economy steadily advancing through efforts to stabilize its currency, curb inflation, and encourage foreign direct investment (FDI). Mergers and acquisitions have become an attractive option for many businesses instead of folding with a notable increase in such activity.  According to Baker McKenzie’s research of Refinitiv data, 333 M&A agreements worth USD 57.7 billion were announced in sub-Saharan Africa (SSA) in the first half of 2021 (H1 2021). This resulted in a significant 576% rise in deal value and a 14% increase in deal volume when compared to the same period last year (H1 2020). In H1 2020, 293 M&A transactions totaling USD 8.5 billion were recorded.[1]

 

STATE OF MERGERS AND ACQUISITIONS (M&A) IN GHANA

Driven by economic diversification, growing foreign investment, and regulatory reforms, the M&A landscape in Ghana has seen substantial growth. This expansion touches several key sectors, including banking, telecommunications, and energy, with M&A activity aiming to boost competition, expand services, and stabilize the economic climate. Ghana registered 14 deals overall for the year 2020 (FY 20), up 17% from the previous year, with 10 deals in the second half of 2020 alone (H2 20). In H2 20 and FY 20, the total deal value increased by 11607% to $818 million and 3369% to $832 million, respectively.[2]

Cross-border transactions accounted for a significant amount of Ghana’s M&A activity, with a total deal value of $793 million for both FY20 (nine agreements) and H2 2020 (seven deals).[3]

The desire for resilience has become a key motivator for businesses operating in competitive markets. Additionally, a supportive regulatory environment has played a significant role in driving the rise of M&A transactions in Ghana. Ghana is now more attractive to both domestic and foreign investors due to its advantageous West African location and participation in the African Continental Free Trade Area (AfCFTA).

Access to a vast African market has been facilitated by the AfCFTA, which was formally introduced in 2021 and established the largest free trade area in the world in terms of the number of participating nations. Because of this integration, companies in Ghana who want to grow and take advantage of economies of scale have a strong argument for mergers and acquisitions. Both Ghanaian businesses and international corporations are taking advantage of these chances, leading to calculated M&A deals meant to expand their market share both inside and outside of Ghana.

In Ghana, the banking industry is a key component of M&A, especially as a result of legislative changes. In order to improve the stability of the financial sector, the Bank of Ghana has increased capital requirements in recent years. When smaller banks find it difficult to comply with these regulations, they frequently think about combining with larger organizations. These mergers help make the banking industry stronger, which may lower risks and boost customer confidence. The financial environment has changed as a result of this wave of mergers, bringing together both domestic and foreign firms that are better able to aid Ghana’s economic expansion.
Notable M&A transactions have also occurred in the telecoms industry. Notable is the Ghanaian government’s recent takeover of AirtelTigo, which was done as a means of preserving jobs and ensuring service continuation. Telecom M&A activity helps to extend services and build infrastructure, particularly in rural areas. Companies are better equipped to invest in digital innovations, enhancing network quality and extending coverage, by pooling resources. However, this tendency may also result in fewer competitors controlling a larger portion of the market, which could impact competition and potentially drive up costs.

M&A is a logical component of the expansion of the oil and gas industry in a resource-rich nation like Ghana. Ghana is a desirable destination for foreign investment due to its oil deposits and growing energy needs. In order to grow its infrastructure and secure resources, energy corporations turn to acquisitions. In addition to creating jobs and fostering local development, this sector’s M&A activity brings up regulatory and environmental issues. To make sure that this development doesn’t jeopardize community welfare and environmental norms, a balanced strategy is required.

 

EFFECTS OF MERGERS AND ACQUISITIONS (M&A) ON THE ECONOMY

Mergers and acquisitions (M&A) can offer a significant boost to Ghana’s economic growth. The capital infusion that comes with these deals enables companies to scale up their operations, creating new job opportunities and contributing to economic stability. As companies grow larger through consolidation, they often have more resources at their disposal to innovate, reach broader markets, and increase their revenue streams. However, the restructuring that typically follows a merger can result in job cuts, leading to concerns about job security, particularly in industries where redundancies are most likely.

When it comes to competition and consumer impact, M&A can bring both advantages and challenges. On one hand, merging businesses can achieve economies of scale, which often leads to cost reductions. On the other hand, consolidation can reduce market competition. As a few large companies dominate, there’s a risk that they might raise prices or limit the variety of choices available to consumers. In Ghana, regulatory bodies such as the Securities and Exchange Commission (SEC) and the Bank of Ghana are vital in ensuring that M&A activities don’t undermine fair competition or harm consumer interests.

Another notable benefit of foreign mergers is the introduction of new technologies and business practices into the local market. Many multinational companies bring advanced systems and expertise, boosting productivity and fostering innovation. The telecom and fintech industries, in particular, have seen significant advancements due to these partnerships. For example, mobile banking has thrived thanks to foreign collaborations, helping to expand financial inclusion both in Ghana and across Africa.

 

LAWS THAT REGULATE MERGERS AND ACQUISITION (M&A) TRANSACTIONS IN GHANA

The legal and regulatory landscape in Ghana plays an essential role in M&A. Laws like the Securities and Exchange Commission’s 2008 Takeovers and Mergers Code (SEC Rules) govern a typical merger or acquisition deal. Other legislation that regulates M&A transactions is the Companies Act (Act 992) along with guidance from regulatory authorities like the Ghana Investment Promotion Centre (GIPC) and the Bank of Ghana, offers frameworks for overseeing M&A activities. A successful M&A transaction requires compliance with industry-specific regulatory consents, such as the Securities Exchange Commission Code on Takeovers and Mergers 2008 (Takeovers Code) and the Securities Industry Act, 2016 (Act 929). When engaging in M&A, the company’s constitution is equally crucial.[4]

 

CONCLUSION

In Ghana, M&A serves as a powerful economic driver, encouraging growth, technological advancement, and market resilience. As the Ghanaian economy continues to evolve, mergers and acquisitions will remain a critical strategy for businesses aiming to enhance their competitiveness in a dynamic market.

 

 

 

[1] https://africabulletin.com/massive-increase-in-ma-deal-value-in-sub-saharan-africa-in-the-first-half-of-2021/

[2] https://africaneyereport.com/ghanas-solid-performance-in-mergers-and-acquisitions-in-2020/

[3] https://africaneyereport.com/ghanas-solid-performance-in-mergers-and-acquisitions-in-2020/

[4] https://bpaghana.com/ma-current-trends-in-the-ghanaian-economy/

 

 

BY; Priscilla Mbama Yakubu

 

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

THE CIVIL JURISDICTION OF THE SUPERIOR COURTS IN GHANA

INTRODUCTION

 

The Courts Act 1993 (Act 459) stipulates the jurisdiction of the courts in Ghana. The jurisdiction of a court refers to the power a court has to adjudicate on matters that come before it and to issue orders. This is necessary to ensure every Court’s mandate and order in the judicial system.

The Jurisdiction of the Supreme Court

1. General jurisdiction
2. As the final court of appeal
3. It is not bound by the decision of any other court
4. It may depart from its previous decision
5. All other courts are bound by its decisions on questions of law
6. It has all the powers, authorities, and jurisdiction vested in any court established by the constitution
7. Original jurisdiction meaning that matters which fall within 2a and 2b commences from the Supreme Court.
8. In all matters relating to the enforcement or interpretation of the Constitution
9. In all matters arising as to whether an enactment was made in excess of the powers conferred on Parliament or any other authority or person by law or under the Constitution.
10. Appellate Jurisdiction
11. In the adjudication of appeals from the Court of Appeal. These are matters either civil or criminal. Cases that commenced either in the High Court or a Regional Tribunal and the decision has been appealed against in the Court of Appeal may appeal against the decision of the Court of Appeal at the Supreme Court as of right but cases which commenced in the Courts below the High Court and Regional Tribunal and which the decision has been appealed against at the Court of Appeal, would need to seek leave of the Court of Appeal to further appeal the Court of Appeal’s decision in the Supreme Court. And to appeal matters relating to the issue or refusal of a writ or order of habeas corpus, certiorari, mandamus, prohibition, or quo warranto directly. These are appeals from a lower court to the High Court which decision is being appealed against in the Supreme Court by invoking the supervisory jurisdiction of the Supreme Court.
12. In the adjudication of an appeal from a decision of the Judicial Committee of the National House of Chiefs to the Supreme Court with the leave of that Judicial Committee or the Supreme Court.
13. Supervisory Jurisdiction of Supreme Court

The Supreme Court has supervisory jurisdiction over all courts and over any adjudicating authority or body by way of issuing orders and directions including orders like habeas corpus, certiorari, mandamus, prohibition, and quo warranto to enforce or secure the enforcement of its supervisory power. Consequently, an application may be filed directly in the Supreme Court invoking its supervisory jurisdiction in respect of matters commencing from the High Court which decision in an opinion, flouts the rule of natural justice.

 

5. Power of the Supreme Court to Review its Decisions.

The Supreme Court has the power to review its own decision made or given upon such grounds and subject to any conditions that may be prescribed by the rules of court.

 

6. Production of Official Documents in Court.

The Supreme Court has exclusive jurisdiction to determine whether an official document should not be produced in court because its production or the disclosure of its contents will be prejudicial to the security of the State or will be injurious to the public interest.

 

The Jurisdiction of the Court of Appeal

1. The Court of Appeal has jurisdiction throughout Ghana to hear and determine, appeals from a judgment, decree or order of the High Court and Regional Tribunals and such other appellate jurisdiction as may be conferred on it by the Constitution or any other law.
2. It is as of right to appeal a judgment, decree, or order of the High Court and Regional Tribunal to the Court of Appeal.
3. To hear appeals from any judgment of a Circuit Court in a civil cause or matter.
4. A person aggrieved by any interlocutory order or decision made or given by a Circuit Court may appeal to the Court of Appeal against the order or decision with the leave of the Circuit Court on the first instance and upon a refusal with the leave of the Court of Appeal and the Court of Appeal shall have jurisdiction to hear and determine any such appeal.
5. The Court of Appeal shall not entertain any appeal unless the appellant has fulfilled all the conditions prescribed by the Rules of Court.
6. For the purpose of hearing and determining an appeal within its jurisdiction and the amendment, execution, or enforcement of a judgment or order made on any appeal, and for the purpose of any other authority expressly or by necessary implication given to the Court of Appeal by the Constitution, this Act or any other law, the Court of appeal shall have all the powers, authority and jurisdiction vested in the court from which the appeal is brought.
7. If the Court of Appeal is satisfied that owing to exceptional circumstances the interest of justice requires that there should be a re-trial, the Court may order a re-trial on such terms and conditions as it thinks fit.

 

The Jurisdiction of the High Court.

1. Subject to the provisions of the Constitution, the High Court shall have—
2. An original jurisdiction in all matters;
3. Appellate jurisdiction in any judgment of a District Court or Juvenile Court;
4. Jurisdiction to enforce the Fundamental Human Rights and Freedoms guaranteed by the Constitution; and
5. Any other jurisdiction conferred by the Constitution, this Act (Courts Act 1993, Act 459), or any other enactment.
6. A Justice of the High Court may, in accordance with the rules of court, exercise in court or in chambers, all or any of the jurisdiction vested in the High Court by the Constitution, this Act, or any other law.
7. Supervisory Jurisdiction of the High Court.

The High Court has supervisory jurisdiction over all lower courts and any lower adjudicating authority; and may, in the exercise of that jurisdiction, issue orders and directions including orders in the nature of habeas corpus, certiorari, mandamus-prohibition and quo warranto for the purpose of enforcing or securing the enforcement of its supervisory powers.

4. High Court Jurisdiction Over Acts of Piracy.

Subject to any right of appeal conferred by any enactment, only the High Court shall have jurisdiction to try an act of piracy.

5. High Court Jurisdiction in Relation to Infants.
6. In addition to any jurisdiction conferred by any enactment, the High Court shall have power, subject to the provisions of any other enactment on application by any person, and after hearing any objections to the application, to appoint any person as a guardian or as joint-guardian for an infant, where the Court is of the opinion that the appointment is desirable in the circumstances having regard to the welfare of the infant
7. On application by any person, and after hearing any objections to the application, to make such orders concerning the custody of an infant, the right of access to an infant, and weekly or other periodic payments towards the maintenance of an infant, as the Court may consider just in the circumstances, having regard to the means of the persons concerned and the welfare of the infant
8. For good cause to remove any guardian or joint-guardian and to appoint a new guardian or joint-guardian
9. To determine any dispute between a guardian and a parent, or between joint guardians
10. To intervene in any guardianship where in the opinion of the Court the guardian has acted or is likely to act prejudicially to the welfare of an infant and to make such consequential orders as the Court may consider desirable having regard to the welfare of the infant
11. In respect of any infant to make such orders and give such directions for the control and administration of the estate of that infant, including the investment of money, as the Court may consider desirable having regard to the welfare of the infant
12. In respect of any infant to make such orders and give such directions permitting the use of money for the education of the infant, or for setting him up in any occupation or career, as the court may consider desirable having regard to the welfare of the infant.
13. The welfare of the infant shall be the primary consideration of the High Court in the exercise of its powers under this section.
14. High Court Jurisdiction in Relation to Persons of Unsound Mind.
15. In addition to any jurisdiction conferred by any enactment, the High Court shall have power subject to the provisions of any other enactment on application by any person, and after hearing any objections to the application, to appoint any person as a guardian or as joint-guardian for a person of unsound mind or to direct the person of unsound mind to be delivered into the care of a responsible authority or a relative, where the Court is satisfied that such course is desirable to ensure the welfare of the person of unsound mind
16. To vary or rescind for good cause an appointment made under paragraph (a) and to attach such conditions to an appointment as may appear desirable
17. To make such orders and give such directions as appear necessary or desirable to secure the maintenance, safety, and welfare of a person of unsound mind, the efficient administration, disposition, and management of any of his property or affairs, and for purposes ancillary to them
18. To make such orders as appear necessary or desirable to secure the carrying out of any contract entered into by a person of unsound mind, or the conduct of any legal proceedings in his name or on his behalf.
19. High Court Jurisdiction in Maritime Matters.
20. The High Court, subject to the provisions of any other enactment, has jurisdiction to hear and determine any of the following questions or claims as to the title to or ownership of a ship, or the proceeds of the sale of a ship, arising in an action relating to possession, salvage, damage, necessaries, wages or bottomry
21. A question arising between the co-owners of a ship registered at a port in Ghana as to the ownership, possession, employment, or earnings of that ship, or any share of it, with power to settle any account outstanding and unsettled between the parties in relation to it, and to direct the ship, or any share of it, to be sold, or to make such order as the Court thinks fit
22. A claim for damage to a ship (whether received on the high seas or within the territorial waters or for damage done by a ship)
23. Subject to section 249 of the Merchant Shipping Act, 1963 (Act 183), a claim in the nature of salvage for services rendered to a ship (including services rendered in saving life from a ship), whether rendered on the high seas or within the territorial waters, and whether a wreck in respect of which the salvage is claimed is found on sea or land
24. A claim in the nature of towage, whether the services were rendered on the high seas or within the territorial waters
25. A claim for necessaries supplied to a foreign ship (whether supplied on the high seas or within the territorial waters) and a claim for necessaries supplied to a ship elsewhere than in the port to which the ship belongs
26. A claim by a seaman for wages earned by him on board a ship, whether due under a special contract or otherwise and a claim by the master of a ship for salary earned by him on board the ship and for disbursements made by him on account of the ship
27. A claim in respect of a mortgage of any ship, being a mortgage duly registered under the Merchant Shipping Act, 1963 (Act 183), or in respect of any mortgage of a ship which is, or the proceeds of which are, under the arrest of the Court
28. A claim for building, equipping, or repairing a ship, if at the time of the institution of the proceedings the ship is, or the proceeds of it are, under the arrest of the Court
29. A claim arising out of an agreement relating to the use or hire of a ship, or the carriage of goods or persons in a ship, or in tort in respect of goods or persons carried in a ship.
30. The High Court also has power in an action of restraint instituted by part-owners, to give such relief as it considers just and equitable, including the imposition of bail on defendant part-owners to ensure the safe return of any ship
31. To remove for good cause the master of any ship within the jurisdiction of the High Court and to appoint a new master
32. To give such relief as it considers just and equitable including the granting of injunctions, in respect of injurious acts done upon the high seas.
33. Rights of Appeal to the High Court.
34. Where a person is aggrieved by any judgment of a District Court in a civil matter such a person may appeal against the judgment to the High Court.
35. Where a person is aggrieved by an interlocutory order or decision made or given by a District Court such a person may appeal against the decision or order to the High Court with the leave of the District Court or the High Court and the High Court shall have jurisdiction to hear and determine the appeal.
36. Any appeal against a judgment of a Circuit, District, or Juvenile Court, shall, subject to any transfer directed by the Chief Justice, be made to the Judge of the High Court exercising jurisdiction over the area of jurisdiction of the Circuit, District, or Juvenile Court.
37. The High Court shall not entertain any appeal unless the appellant has fulfilled all conditions imposed on that behalf by Rules of Court. [As substituted by the Courts (Amendment) Act, 2002 (Act 620), s.3]

 

In conclusion, the jurisdiction of these superior courts is strictly adhered to in ensuring systematic practice in Ghana’s legal system.

 

BY; VIDA NARKIE ODONKOR ESQ.

 

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

 

 

 

 

 

 

 

 

 

 

Introduction

Losing a loved one is an emotional experience, and amidst the grief, practical matters like managing their financial assets can seem overwhelming. These issues often appear insurmountable during the emotional aftermath of a loved one’s death. Depending on the person’s social and family dynamics, the death of a loved one can often give rise to much confusion and disagreement over identifying, protecting and distributing assets and funds belonging to the deceased. Persons describing themselves as heads of family, creditors, executors, next-of-kin, administrators, etc either attempt to seize the mandate over the property or they sometimes have duties they never anticipated now placed on them.

People are often at a loss regarding the processes involved and the way forward, and they are often misled as to what the law says because of common misconceptions and the influence of popular media, particularly when one considers that the processes to be undertaken and the principles involved vary depending on factors like the nature of the assets held by the deceased, whether the deceased died with a will, the existence of beneficiaries of the deceased and the existence of creditors amongst others. This article seeks to look at an aspect of these processes, particularly the protection and distribution of funds held by third party institutions such as banks and insurance agencies on behalf of the deceased.

Quite often, the deceased person may have held funds in some kind of account during their lifetime. These could include, but are not limited to, funds held in a traditional bank account, savings and investment accounts with financial institutions, retirement accounts such as pensions or provident funds, and life insurance policies. In addition, the deceased may have participated in cooperative societies or credit unions, which often hold dividends, shares, or savings on behalf of their members. There may also be more specialized accounts, such as trust funds, educational savings plans, or endowment policies. Other examples could include digital wallets or cryptocurrency holdings, which are becoming increasingly common in the modern financial landscape. There is often a fair bit of confusion that arises regarding how these funds should be distributed upon their death. Such confusion can be for a variety of reasons. These include the ignorance of the representatives over the existence of such accounts, the dissipation of the funds where the account is held jointly or where a specific person, often a particular spouse or child, has access to the accounts and dissipates the funds for themselves.

As a preliminary point, it must be stated that, subject to certain legal conditions considered below, funds held by these institutions constitute personal property of the deceased person and forms part of the estate of the deceased person. These funds, being personal property, are subject to distribution according to the laws governing succession. Whether the deceased left a will[1] (testate) or died without one (intestate),[2] these assets must be managed and distributed according to the legal processes established for handling estates.

Where the deceased died with a will, the person(s) appointed as executor(s) under the will must apply to the relevant court for probate. Once such probate is granted, the executor is legally bound to manage and distribute the estate in accordance with the dictates of the will and law. Where the deceased died without a will or where the will fails to provide for some property owned by the deceased, the estate or the remainder not covered by the will must be distributed pursuant to the rules on intestacy as provided under the Intestate Succession Law, 1985 (PNDCL 111). Here, the beneficiaries stated under PNDCL 111 may apply to a competent court to be granted letters of administration.

The second preliminary point worthy of note is what amounts to a will or, at the very least, a testamentary disposition. Per renowned jurist, James Kent,[3]:

“A will is the disposition of real and personal property to take effect after the death of the testator. When the will operates upon personal property, it is sometimes called a testament, and when upon real estate, a devise; but the more general and the more popular denomination of the instrument, embracing equally real and personal estate, is that of last will and testament.”

Thus, the most basic definition of a will is a document or an instrument within which a person states how their property should be disposed of following their death. A will is said to be a declaration of intent of the testator[4] and it only takes effect upon the death of the testator.[5] Thus, its provisions are referred to as testamentary dispositions. Once a will meets the validity requirements of the jurisdiction[6] in which it is intended to be enforced, it is admittable to a grant of probate pursuant to the relevant law of the said jurisdiction. Note however, that in the Ghanaian jurisdiction, even when the instrument fails to meet the validity requirements of a will under the Wills Act, but still contains testamentary dispositions ostensibly from the deceased person, the document may still be enforced by way of an application for Letters of Administration with Will Annexed subject to the provisions of the Administration of Estates Act, 1961, Act 63[7]  by a beneficiary under the will or a beneficiary of the estate under intestacy.[8] This acts to save a will that would have otherwise been valid but for a few technicalities or errors in execution.

Having understood the basics of testamentary dispositions, one would naturally wonder the kinds of documents that could be considered to fall under this category. This is the point where the role of the next-of-kin becomes relevant. As part of KYC processes,[9] banks and financial institutions will, amongst other things, often require a prospective client to designate an individual as their next of kin. This person is often noted to be the first point of contact for the institution should it have difficulty in contacting the account holder such as in an instance where the holder is deceased. The account holder provides the contact information of the next of kin. There’s a common misconception that being named as next-of-kin entitles a person to receive or inherit the funds upon the passing of the account holder.

This general belief was considered by the oft-eulogised Koranteng-Addow J. of blessed memory in the 1973 case of In Re Appiagyei-Danka (Deceased.); Appiagyei-Danka And Another v. Appiagyei-Danka[10]. In that case the deceased, a lecturer of the University of Science and Technology, Kumasi,[11] had named his mother as his next of kin on the nomination form used in joining the superannuation scheme for lecturers of the university. Upon his unfortunate passing, his mother applied to the court for the superannuation benefits to be paid to her. The core issue to be determined was whether the said nomination as next-of-kin should be construed to be proof of an intention to so transfer the funds to his mother. Her Legal Counsel, L. B. Akainyah Esq., argued for Section 14 of the Wills Act to be applied to the matter. This section states:

• Notwithstanding anything in this Act or any other enactment, where a person takes out a policy of life insurance on his life for a sum which is expressed on the face of the policy to be for the benefit of a member of his family then, unless the nomination of that member is expressly revoked by a will duly made in accordance with this Act or in any other manner approved by the contract of insurance, upon the death of the insured person, the sum assured shall not form part of his estate but shall, subject to the provisions of this section, be paid to the person so nominated. (Emphasis is mine)

The learned Justice of the High Court held against applying Section 14 of the Wills Act to the facts in the matter before her. She based her decision on the rationale that the designation of the mother of the deceased as next of kin did not, without more, amount to proof that the deceased had intended to devise the funds to her upon his death. She stated thus:

“By looking at the nomination paper (exhibit B) I cannot find any indication on it that the next-of-kin named is to be the beneficiary under the scheme. Next-of-kin is a person’s nearest blood relation and, as deposed to by the assistant registrar, the object of the university in requiring the making of such nomination is to assist the university to trace and contact the relatives of a deceased participant. I accept that evidence. If the university had intended that whoever is named in the nomination paper as the next-of-kin should be the beneficiary there is no doubt that the form would have said so. I have myself seen a type of nomination form in which it is stipulated that the person or persons named should be the beneficiary or beneficiaries under a similar scheme. On that form the proportions in which the beneficiaries are to take were indicated. That type of nomination form came from the Railways and Harbours Administration in a case the title of which I cannot at the moment remember. The nomination aper in this instant case is not of that type. It only has among other things a column for naming the next-of-kin and it stops there.”

Thus, the learned Justice held that a document falling under Section 14 must not only name the individual but must also state that the person is to take the money as beneficiary upon the demise of the account holder.

It is important to note the latter parts of Section 14 above. Per the section, where the conditions precedent are met, the amount no longer forms a part of the Estate of the deceased and becomes the entitlement of the named beneficiary. This means that a person who is named as a beneficiary or named as a person to whom payments should be made under a life insurance policy needs not apply to a court for Probate or Letters of Administration to entitle them to recover the sums. They are entitled to the amount as of right. This principle was at the core of the dispute in the Court of Appeal decision of Ama Serwah V. Yaw Adu Gyamfi and Vera Adu Gyamfi (2018).[12]

The facts of this case do provide some intrigue. In this case, the Appellant, AS, a widow residing in Kumasi, claimed that her deceased husband’s pension benefits from Italy, intended for her and her three children, were fraudulently diverted by her brother in law, YA, and his wife, VA, who were the Respondents in the case. AS authorized YA, her late husband’s brother, to assist with processing the pension benefits since she could not travel due to pregnancy. However, she later discovered that YA and VA had opened an account using her details and fraudulently collected the benefits. AS reported the matter to the police, alleging they had diverted $113,000. The Respondents denied the allegations, stating that the funds were not pension benefits but insurance compensation for the deceased, and YA, as the next-of-kin, was entitled to the payments. They claimed that AS and her children were only receiving the funds as beneficiaries because YA had chosen to include them and they denied any fraudulent actions. They explained that when payments ceased due to lack of document renewal, YA resumed payments using a new account, which the Appellant later contested.

The core issue to be determined by the court was the capacity of the Appellant. The trial judge had dismissed the Appellant’s claim for lack of capacity on the basis that the amounts in question constituted part of the Estate of her deceased husband, and thus, she could only sue in her capacity as an administrator following a valid grant of letters of administration.[13] The Appellate Court, in overturning the ruling of the trial court, held that the funds were not part of the Estate of the deceased, but rather, the legal and contractual entitlement of his spouse and children. Accordingly, the Appellant did not have to first obtain Letters of Administration to recover the amount. Although Section 14 of the Wills Act was not mentioned, it is clear that its provisions were applied in this matter.

Having considered the legal principles advanced above, the position of the law can arguably be summed up as follows: where a person creates an account with funds held by an institution of whatever description and said person designates a person as a beneficiary to whom those funds should be paid upon the death of the person, the stated beneficiary is entitled to receive those funds upon the passing of the individual. (The property no longer belongs to the Estate of the deceased and therefore, the stated beneficiary does not have to apply to the court for Probate or Letters of Administration.) Any other funds held by an institution on behalf of a deceased person, i.e. those without a stated beneficiary upon death, form part of the Estate of the deceased and can only be released by the institution following the grant of Probate, where the deceased left a will, or Letters of Administration, where the deceased left no will or failed to provide for those funds in their will.

It is thus of utmost importance firstly, that individuals who open such accounts understand the nature and purpose of the accounts and ensure that these purposes align with their own goals for opening such accounts. It is also of importance for account managers to understand the legal implications of the accounts created and the legal processes that must be completed before the funds are released, lest they be liable of aiding in intermeddling.[14] As a corollary to these issues as well, it is important that account holders sufficiently disclose the existence of such funds and accounts to their intended beneficiaries as well appointing honest and trustworthy persons as their next-of-kin with such accounts. Such transparency will surely go a long way to ensure the receipt of these funds by the intended beneficiaries.

[1] See Section 1(1) of the Wils Act, 1971 (Act 360)

[2] See Section 1 of the Intestate Succession Law, 1985 (PNDCL 111)

[3] , Commentaries on American Law *501 (George Comstock ed., 11th ed. 1866) as quoted in the 8th Edition of the Black’s Law Dictionary at p 4936

[4] Attorney General v Jones and Bartlett (1817) 146 ER 291

[5] Beddington v. Bauman [1903] A.C. 13

[6] In Ghana, these requirements are stated in the Wills Act.

[7] See In Re Yena, Deceased [1960] GLR 195-201; In Re Nkansah (Decd): Nkansah Alias David V. Okyere [1989-90] 2 GLR 195; David Lamptey V. Rebecca Kwatekai Lamptey (2016) JELR 108213 (HC) ·

[8] See Order 66 Rule 12(1) of the High Court (Civil Procedure) Rules, 2004 (C. I. 47)

[9] KYC, or “Know Your Customer,” is a process banks use to verify the identity of their customers. It involves collecting documents like an ID and proof of address to ensure the bank knows who they’re dealing with. This process helps prevent fraud, money laundering, and other illegal activities by ensuring that only legitimate customers can access banking services.

[10] In Re Appiagyei-Danka (Decd.); Appiagyei-Danka And Another v. Appiagyei-Danka [1973] 2 GLR 188-190

[11] Now the Kwame Nkrumah University of Science and Technology (KNUST)

[12] Ama Serwah v. Yaw Adu Gyamfi and Vera Adu Gyamfi (2018) JELR 64552 (CA)

[13] See Asante-Appiah V. Amponsa [2009] SCGLR 91; Djin v. Musah Baako [2007-2008] 1 SCGLR 686

[14] This is the criminal offence of dealing or dissipating the estate of a deceased person without the grant of probate or letters of administration. See In Re Appau (Decd); Appau v. Ocansey [1993-94] 1 GLR 146—159 for its explanation and possible defences.

 

BY; KEKELI DZEKETEY ESQ.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Intellectual Property, Energy, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

 

Introduction

 

Artificial intelligence (AI) is rapidly transforming the legal landscape. Gone are the days of sifting through mountains of paperwork. This technological wave can make legal services faster, more affordable, and more widely available. Traditionally time-consuming tasks such as legal research, case law analysis, contract drafting, contract reviews, and due diligence are significantly accelerated by AI-powered tools. Utilizing these tools, vast amounts of legal data can be processed in mere seconds, pinpointing relevant cases and clauses with unmatched speed and accuracy. However, alongside these exciting possibilities lies a multitude of ethical concerns. This article delves into the complex relationship between AI and the law, exploring the potential pitfalls alongside its benefits and addressing some of the ethical implications that arise with the development and deployment of AI.

 

Defining Ethics

 

Ethics are the set of moral principles that govern what is good or bad generally. Legal ethics refers to the unique responsibilities of lawyers and the legal system, given the important role and influence they have in society. Because of the nature of their work and their close involvement in the administration of law, lawyers are subject to special standards, regulations, and liability.^[1] AI Ethics are principles and guidelines that guide the responsible use of AI tools. These can also be defined as the sets of guidelines, considerations, and principles that have been created to responsibly inform the research, development, and usage of artificial intelligence systems.^[2] Legal professionals including lawyers, law students, and paralegals need to ensure that professional codes are observed when incorporating AI into research and decision-making. This means actively checking AI outputs for bias and making sure the information received is fair and unbiased.

 

Training AI

 

Training artificial intelligence (AI) involves using complex datasets to build models that can reach conclusions without human intervention. AI models apply various algorithms to relevant data inputs to accomplish their programmed tasks. The output generated by AI is based on the data they have been trained with, but there is a possibility that this output may be biased or inaccurate due to already existing biases in the training data. In the legal field, it is crucial for lawyers, paralegals, and law students to critically review AI-generated outputs and make informed decisions based on the information provided. While it can be tempting to trust these algorithms, legal professionals should always apply their reason and judgment to AI-generated information. By carefully analysing these ethical considerations, we can ensure that AI is used for good while upholding the core principles of fairness and justice.

 

Ethical Considerations

 

It’s crucial to understand that AI in the legal field is meant to complement human expertise rather than replace decision-making. When integrating AI into their practice, legal professionals must consider ethical concerns to uphold justice, fairness, and ethical standards. This ensures that AI enhances the legal process while maintaining important human values. It’s essential to balance the benefits of AI with the need for accountability and transparency. By carefully addressing these ethical considerations, legal professionals can leverage AI to improve their practice without compromising the integrity and fairness of the legal system. Let’s now explore these critical issues in more details:

 

1.  Bias and Fairness

An AI model’s output is based on the data which was used during the training process. Where the AI system is trained with biased data, one should expect the output to reflect the bias. One well-known example is the COMPAS system used in the United States criminal justice system, which predicts the likelihood of a defendant reoffending. A study by ProPublica found that the system was biased against African-American defendants, as they were more likely to be labelled as high-risk even if they had no prior convictions. Another study found similar biases in a similar system used in the state of Wisconsin.^[3] Most times, the algorithms might inherently favour certain outcomes over others, leading to biased results. Moreover, it is a requirement that the legal professionals ought to do an oversight on the generated outcome. This is because the work product and conclusions reached by AI cannot replace human judgment and must be reviewed by lawyers for completeness and accuracy.^[4]

 

2.  Accuracy

Regardless of the size and complexity of the dataset used to train an AI system, no AI is perfect. AI models tend to hallucinate, an AI hallucination occurs when a model perceives patterns or objects that do not exist, resulting in nonsensical or inaccurate outputs. “These models generate text that looks very human-like, looks very factually correct, competent, coherent, but it might contain errors because these models were not trained on any notion of the truth, they were just trained to generate text that looks human-like, looks like the text they read.”^[5] To account for accuracy, one has to cross-check and verify if the cases, research work, or any output generated or produced by an AI Model are authentic and sound.

 

3.  Data Privacy

Data privacy is an important ethical consideration. Legal professionals are committed to protecting the personal data of clients, therefore ensuring that the information shared by their clients is kept confidential. Using an AI model for document summarization, legal research, clause analysis, risk assessment, review checklist, and contract comparison may contain highly sensitive information. A data breach in an AI system could have its disadvantages for clients, exposing their financial records, personal details, or legal strategies. Ensuring that the AI system adheres to strict data privacy and confidentiality standards to protect information is of utmost importance.

 

4.  Responsibility and Accountability

Responsibility involves the ethical duty to act with care and consideration in the development, deployment, and use of AI models. Accountability also refers to duty to be answerable for the actions of the AI. Legal professionals and organizations must be prepared to take responsibility for the results generated by the AI system, including any errors, biases, or adverse effects. The final responsibility for legal decisions should rest with judges and legal professionals, who must exercise their professional judgment and consider the broader legal and ethical implications. ^[6]

 

5.  Transparency

Transparency in AI is crucial in the legal field because it allows stakeholders to understand how AI systems reach their conclusions, fostering trust and accountability. This visibility helps ensure that AI-driven decisions are fair, accurate, and free from biases, aligning with ethical standards. By informing clients when AI contributes to their cases, legal professionals promote informed consent, enabling clients to engage more meaningfully with their legal representation. Transparent AI systems also facilitate compliance with regulatory requirements by providing clear audit trails, essential for defending AI-assisted decisions. Additionally, transparency supports the continuous improvement of AI technologies by highlighting areas for refinement, ultimately enhancing their reliability and performance. Overall, transparency not only builds trust and encourages the responsible use of AI in legal practice but also promotes the widespread adoption of these innovative tools by demonstrating their fairness and effectiveness.

 

Conclusion

The importance and benefits of AI in the legal field are undeniable. It is equally important to note that responsible use of AI in law involves addressing accountability, bias, data privacy, and transparency.  By integrating ethical practices and refining our approaches, we can confidently use AI’s power to help legal professionals focus on client-centered tasks. This ensures that advancements in artificial intelligence serve the legal profession efficiently and ethically, upholding fairness and individual rights. Legal institutions, policymakers, and AI developers need to collaborate in establishing guidelines for the responsible and transparent use of AI in the legal field. This collaboration can help in developing frameworks that mitigate bias, protect sensitive data, and provide mechanisms for accountability in AI-powered legal applications. Ongoing training and education programs can further assist legal professionals in understanding, using, and monitoring AI tools effectively while maintaining ethical and legal standards, and enhancing public trust in AI-enabled legal systems.

 

^[1]https://www.law.cornell.edu/wex/legal_ethics#:~:text=Most%20 commonly%2C%20 legal%20ethics%20 refers,may%20not%20be%20 legally%20required.

^[2]https://tech.co/news/ai-ethics-principles-and-issues#:~:text=AI%20at%20Work-,What%20Is%20 AI%20Ethics%3F,usage%20of%20 artificial%20intelligence%20 systems.

[3] Angwin, J., Larson, J., Mattu, S., & Kirchner, L. (2016). Machine bias risk assessments in criminal sentencing. ProPublica, May, 23.

^[4] AI and Ethical Concerns for Legal Practitioners, https://www.lexisnexis.com/community/insights/legal/b/thought-leadership/posts/ai-and-ethical-cconcerns-for-legal-practitioners#:~:text=Proper%20 oversight%20 is%20 essential%20to,any%20work%20 product%20it%20 generates.

^[5] Simon Little(February 5, 2024)B.C. ruling on AI ‘hallucinated’ fake legal cases could set precedent, experts say https://globalnews.ca/news/10273910/chatgpt-bc-legal-precendent/

^[6] Exploring The Use of AI In Legal Decision-Making: Benefits and Ethical Implications https://woxsen.edu.in/research/white-papers/exploring-the-use-of-ai-in-legal-decision-making-benefits-and-ethical-implications/

 

BY; NICOLINN NANA ADJOWA KWAW

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Intellectual Property, Energy, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

 

What is Intellectual Property?

 

Intellectual property (IP) refers to the creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce. There is not one law that protects Intellectual Property collectively. Therefore, for all the forms or types of intellectual property, there is a law that protects them.  For example, patents, copyrights, and trademark laws enable people to earn recognition or financial benefit from what they invent or create.  Intellectual property is a broad term used for a category of intangible creations or tangible assets of the human intellect that are owned and legally protected by company(s) or individual(s) from outside use or implementation without the owner’s consent. Infringement on intellectual property occurs when a person engages in the unauthorized use of an intangible creation or a tangible asset. The legal protection that affords most intellectual properties expires after some time but may last forever for others. Producing intellectual property requires a great deal of brainpower, time, financial resources, and skill, and therefore, it should not be accessed without the consent of the owner(s).

 

Types of intellectual property

 

Patents

A patent is the granting of an exclusive right for an invention. The grant provides the patent owner or inventor with the protection he or she requires to protect the invention and enables the patent owner or inventor to make public technical information about the invention in the published patent document. The Patents Act, 2003 (Act 657) protects inventors in Ghana.

 

Copyright

Copyright is a legal right that creators have over their literary and artistic works. It also means that only the original creators of the works and anyone they authorize can reproduce their literary and artistic works. Examples of works covered by copyright are books, music, paintings, sculptures and films, computer programs, databases, advertisements, maps, and technical drawings. The Copyright Act, 2005 (Act 690) protects creators within the literary and artistic industry in Ghana. In the case of CHARLES UCHE AYIKA AND CHINEDU SAMUEL UGOCHUKWU vs. MR. KWESI TWUM AND MULTIMEDIA GROUP LTD.  [COURT OF APPEAL (CIVIL DIVISION), ACCRA] APPEALNO.HI/235/2018 DATE: 11TH JULY 2019. The Appellants, Charles Uche Ayiku and Chinedu Samuel Ugochukwu are the owners of the copyright in the cinematograph film entitled “Arrows of Love” Parts 1 & 2. The Appellants granted the right to market the film to a Nigerian Company called Chiddo Productions Ltd. on a contract valued at N200,000,000.00 whereas Rich Investment Company Ltd. had the exclusive license to market and distribute the English version of the film. It is the case of the Appellants that, before four million copies of the film could be supplied, the Respondents, Mr Kwesi Twum and Multimedia Group Ltd had without license from the Appellants commenced transmission of the said film worldwide on their digital television system.

 

The court held that in every action for infringement of copyright, proof of actual damage is not necessary. Damages indeed are said to be at large. In awarding damages for infringement of copyright, the court ought to consider (i) the flagrancy of the infringement and (ii) any benefit shown to have accrued to the Defendant because of the infringement. See; WILLIAMS VS. SETTLE [1960] 2 AII ER.806. Therefore, in awarding damages, the court must take into consideration the flagrant way the Plaintiff’s work was infringed and the apathetic and nonchalant manner in which the Defendant will respond to any notice of the infringement. Where the Defendant’s conduct is motivated by glitters of profit in the infringement of the copyright or is found to be intoxicated by the motivation for that profit, then the award of damages ought to be higher and sufficiently compensable to the Plaintiff.

 

The court further indicated that the infringement of copyright is actionable per se and compensatory damages in a general nature will be the natural consequence, the evidence of the claim for loss contract suffered by the Appellants even in the failure to prove specifically the claim for N200,000,000.00 and N15,000,000.00 respectively as special damages, the quantum of award in the sum of Ghc100,000.00 in the peculiar circumstances of this case is woefully inadequate. The court enhanced the award by adding a sum of Ghc150,000.00 for the undisputed conduct of infringement by the 2nd Respondent which the Trial Court found as flagrant and brazen only because of an assurance the Respondents claim to have had from a business partner Victor Emeghara of O’Hara Productions without proper due diligence.

It is worth noting that an award of damages is to adequately compensate or to restore a person who has suffered an infringement on its product to the financial position they would have been in if the infringement had not occurred.

 

Trademarks

A trademark is a sign a distinctive word or a combination of both capable of distinguishing the goods or services of one enterprise or producer from those of other enterprises or producers. Section 10 of the Protection Against Unfair Competition Act 2000, Act 589 defines trademark as marks relating to goods, marks relating to services, and marks relating to both goods and services. Trademarks date back to ancient times when artisans used to put their signature or “mark” on their products. It provides exclusive right to the enterprise or producer to use the trademark to identify goods or services or to authorize another to use the trademark in return for payment of royalty. The registration of a trademark is for ten (10) years and may be renewed for a consecutive period of ten (10) years. This right is protected by the Trademarks Act, 2004 (Act 664) in Ghana and Trademarks Regulations, 1970 (L.I 667).

 

Industrial designs

This refers to the visual features or the appearance of a product that can be legally protected by registering that design. Industrial design is also referred to as a “design patent” in the United States or a “design” in Europe. The registration of an industrial design protects the rights of the designer over the industrial design. The protection excludes others from making, using, selling, or importing any article, which includes the design elements set out in the design document. The industrial design protection protects the unique “look/appearance” of an article. An industrial design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color. The registration of the industrial design is for a limited period of five years which may be renewed for a further two consecutive periods of five years in Ghana. The duration of the registration may vary from one country to the other. The industrial design right may be sold or licensed to others. The Industrial Designs Act, 2003 (Act 660) protects industrial designs in Ghana.

Section 9 of Act 660. Section 9 states that:

(1) The exploitation of a registered industrial design by persons other than the registered owner shall require the consent of the owner.

(2) For the purposes of subsection (1), “exploitation” of a registered industrial design means the making, selling, importing, or otherwise distributing for commercial purposes, articles bearing or embodying a design which is a copy or substantially a copy of the industrial design.

(3) The rights conferred by registration do not apply to acts in respect of articles which have been put on the market in any country by the registered owner or with the registered owner’s consent.

(4) The registered owner may, in addition to any other rights, remedies or actions available under an enactment, institute court proceedings against a person who infringes the industrial design or who performs an act which makes it likely that infringement will occur.

 

Sections 23 and 24 of the Industrial Designs Act, 2003 (Act 660) also states that:

23. An international treaty in respect of industrial property to which the country is a party is applicable to matters dealt with by this Act, and in the case of a conflict with a provision of this Act, the provisions of the international treaty shall prevail.
24. An international application may designate Ghana for an industrial design under the Harare Protocol.

 

The Court, in OM SATNAM LTD vs. EBENEZER APPIAH & ANOR [HIGH COURT (COMMERCIAL DIVISION), ACCRA] SUITNO.CM/0123/16 DATE: 1ST NOVEMBER 2018 found that the Plaintiff in the case had its industrial design of a cube with holes running through it registered with the African Regional Intellectual Property Organization (ARIPO) of which Ghana is a member. As a result, it is eligible to enjoy the rights conferred by Section 9 of Act 660 as stated above.  ARIPO is an inter-governmental organization (IGO) that facilitates cooperation among Member States in intellectual property matters. The objectives of the organization are to pool financial and human resources and to seek technological advancement for economic, social, scientific, and industrial development.

 

Trade Secrets

A trade secret is an intellectual property right on confidential information which may be sold or licensed. The acquisition, use, or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection. Section 84 of the Right to Information Act 2019, Act 989 defines a trade secret as a secret formula or technique, process, program, device, or product known and used to the advantage of only one manufacturer and the disclosure of which would cause significant economic loss to the owner or manufacturer. Trade secrets protect confidential business information, which includes formulas, processes, and methods. There is no specific or limited period for trade secret protection, but the information must be kept confidential to maintain its protected status. The owner of a trade secret or a person authorized by the owner of a trade secret has the privilege to refuse to disclose and to prevent any other person from disclosing the trade secret unless the value of the disclosure of the trade secret substantially outweighs the disadvantages caused by its disclosure. In making his determination as to the existence or otherwise of the privilege the presiding officer shall consider whether the trade secret is adequately protected by patent, trademark, copyright, or other law and whether adequate protection can be provided by disclosure of the trade secret in chambers or any other appropriate manner. When disclosure of a trade secret is required, a court, on its own motion or at the request of any party, may take such actions to protect the trade secret from further disclosure or unauthorized usage as may be appropriate.

 

Geographical indications

Geographical indications and appellations of origin are signs/symbols used on goods that have a specific geographical origin and possess specific qualities, reputations, or characteristics that are essentially attributable to that place of origin. A geographical indication commonly includes the name of the place of origin of the goods.

 

In Ghana, the main intellectual property laws are the Copyright Act, 2005 (Act 690), the Trademarks Act, 2004 (Act 664), the Patents Act, 2003 (Act 657), the Industrial Designs Act, 2003 (Act 660), and the Protection Against Unfair Competition Act, 2000 (Act 589). There is no international Intellectual Property Law that will automatically protect intellectual property throughout the entire world. Protection against unauthorized use in a particular country depends on the national laws of that particular country. It is noteworthy that generally registration of Intellectual Property is based on a first-to-file or first-to-invent depending on the country. Similarly, registering trademarks is based on a first-to-file or first-to-use, depending on the country, so you should consider how to obtain patent and trademark protection before introducing your products or services to the Ghanaian market.  However, being a member or signatory to an Intellectual property organization or convention may afford you some protection among those member countries. Ghana is signatory to several international conventions on Intellectual property which include the World Intellectual Property Organization (WIPO), and the African Regional Intellectual Property Organization (ARIPO), among others. The Harare Protocol and Implementing Regulations on Patents and Industrial Designs Within the Framework of the African Regional Intellectual Property Organization (ARIPO) as amended on November 25, 2022, offers extensive protection for its member countries. In the case of OM SATNAM LTD vs. EBENEZER APPIAH & ANOR [HIGH COURT (COMMERCIAL DIVISION), ACCRA] SUITNO.CM/0123/16 DATE: 1ST NOVEMBER 2018, the court found that the Defendants had infringed on  Plaintiff’s industrial design based on Sections 23 and 24 of the Industrial Designs Act, 2003 (Act 660). An international treaty in respect of industrial property to which the country is a party applies to matters dealt with by this Act, and in the case of a conflict with a provision of this Act, the provisions of the international treaty shall prevail.  An international application may designate Ghana for an industrial design under the Harare Protocol. As well as Section 9 of Act 660 which states that (1) The exploitation of a registered industrial design by persons other than the registered owner shall require the consent of the owner. (2) For the purposes of subsection (1), “exploitation” of a registered industrial design means the making, selling, importing, or otherwise distributing for commercial purposes, articles bearing or embodying a design which is a copy or substantially a copy of the industrial design. (3) The rights conferred by registration are not applicable to acts in respect of articles which have been put on the market in any country by the registered owner or with the registered owner’s consent. (4) The registered owner may, in addition to any other rights, remedies or actions available under an enactment, institute court proceedings against a person who infringes the industrial design or who performs an act that makes it likely that infringement will occur. In the case, the Defendants in their defence averred that they did not infringe the Plaintiff’s design as they did not manufacture the product. However, they admitted importing the product into the country which had the same design as that of the Plaintiff who had a valid registration of its industrial design AP/D/00149 with ARIPO.

 

In an intellectual property infringement of right case, an order for an injunction and damages are normally awarded to compensate or restitute the injured party. In the case of CHARLES UCHE AYIKA AND CHINEDU SAMUEL UGOCHUKWU vs. MR. KWESI TWUM AND MULTIMEDIA GROUP LTD. [COURT OF APPEAL (CIVIL DIVISION), ACCRA] APPEALNO.HI/235/2018 DATE: 11TH JULY 2019 The court stated that the most effective remedy in all intellectual property actions where a breach or infringement of rights has been established or is threatened is an order for injunction by the court. The court further indicated that in the absence of a permanent injunction, the owner of intellectual property rights is vulnerable to other breaches and infringements either from the same Defendant, his agents, and privies, or even third parties. The court again stated that in cases such as in the instant one, where the remedy of injunction is available by statute, principles, and precedents regulating the grant or refusal of injunction at common law are of no real value as they are discretionary. That is why at common law injunction orders like mareva or   pillar are discretionary with the only overriding consideration being that it must be exercised judicially and judiciously in the interest of both parties in the action. In other words, if the remedy sought is at common law the grant or refusal ought not be capricious but by settled rules discernible from a myriad of decisions of the courts.

 

The Supreme Court distinguished between special and general damages in the case of DELMAS AGENCY GHANA LTD. VS. FOOD DISTRIBUTORS INTERNATIONAL LTD. [2007-2008] SCGLR 748. Where His Lordship held inter alia at page 759 that “special damages are distinct from general damages. General damages are such as the law will presume to be the natural or probable consequence of a Defendant’s act. It arises by inference of the law and therefore need not be proved by evidence. The law implies general damage in every infringement of an absolute right. The catch is that only nominal damages are awarded. Where the Plaintiff has suffered a properly quantifiable loss, he must plead specifically his loss and prove it strictly. If he does not, he is not entitled to anything unless general damages are also appropriate”. In the case of ROYAL DUTCH AIRLINES (KLM) VS. FARMEX [1989-1990] 2 GLR 623 at 63 SC the court held that “Special Damages must be specifically pleaded and specifically proved. However, the rule does not imply that if one claims general damages only, one cannot lead evidence of specific damages as a foundation for an award of general damages. After all, in deciding as to how much general damages to award, the Court needs some guidance as to financial loss”. The court also stated that on the measure of damages for breach of contract, the principle adopted by the courts was restitution in integrum, ie if the plaintiff has suffered damage not too remote, he must, as far as money could do it, be restored to the position he would have been in, had that particular damage not occurred. What was required to put the plaintiffs in the position they would have been in was sufficient money to compensate them for what they had lost”.

 

In the case of CHARLES UCHE AYIKA AND CHINEDU SAMUEL UGOCHUKWU vs. MR. KWESI TWUM AND MULTIMEDIA GROUP LTD. [COURT OF APPEAL (CIVIL DIVISION), ACCRA] APPEALNO.HI/235/2018 DATE: 11TH JULY 2019, the court opined that whereas the Appellants pleaded the particulars of special damages and sought reliefs in the quantum of N200,000,000.00 and N15,000,000.00 respectively, the Trial Judge was not impressed with the quality of evidence adduced to substantiate the said claims. They were rejected and in my view rightly so, as from an exhaustive examination of the evidence of the Appellants at the trial, they failed in my view to marshal enough credible evidence to discharge the statutory burden at the threshold. I accept the finding and conclusion of the Trial Judge concerning this head of claim, and the appeal on it is hereby dismissed.

 

The court continued on the premise that the Trial Judge found undisputed evidence of infringement on the part of the 2nd Respondent by their admission. Indeed, he described the 2nd Respondent’s conduct as “flagrant and brazen to say the least”. In an infringement action such as the one before us, particularly in this electronic age, the damage to a copyright holder is exponential and almost always immeasurable by the numbers who have without due recognition of the intellectual and economic rights of the holder infringed upon it in a “flagrant and brazen” manner. Here the court acknowledges the immeasurable damage an infringement on an intellectual property can cause the owner of the intellectual property.

 

In the case of OM SATNAM LTD vs. EBENEZER APPIAH & ANOR [HIGH COURT (COMMERCIAL DIVISION), ACCRA] SUITNO.CM/0123/16 DATE: 1ST NOVEMBER 2018, the court stated that Order 63 r. 8 subrules (1) and (2) of the High Court Civil Procedure Rules 2004 (CI 47) states that 1. Where in an action for actual or threatened infringement of an intellectual property right the infringement is proved, the Court may order the party responsible for the infringement to pay to the rights holder damages which are adequate to compensate for the injury, the right holder has suffered. 2. The Court may in addition to awarding damages under subrule (1), order a person whom it has found to have infringed the property right of a right holder to pay the costs of the right holder.

 

Despite the abundance of case law and statutes to protect intellectual property, it still stands that upon an infringement by a third party, the intellectual property owner must gather as much evidence as possible to prove the extent of infringement and possibly be granted damages that would be sufficient to restore such a person to the position that he/she would have been.

 

Registering an intellectual property can provide cost-effective protection against competitors who make direct copies of the product.  It can be a valuable asset/resource/revenue that can attract investors, sold or licensed or franchised to third parties. It again offers the exclusive right to use the intellectual property making your product different on the market which makes it easier to identify and distinguish the products from that of others. Registering intellectual property grants the right to sue anyone who infringes on that property and be compensated for the unauthorized use of the property. It may also offer the opportunity to expand into other countries.

 

The enforcement of Intellectual Property laws remains weak. Piracy continues, counterfeit computer software and pharmaceuticals are readily available in our markets and pharmacies. The few trademark, patent, and copyright infringement cases that have been filed in Court have moved slowly through the legal system. In recent times, third parties have found it easier to infringe on intellectual property on digital platforms. It is also the case that intellectual property awareness is very limited hence the high number of infringements in the country.

 

Ghana and other countries have to enhance efforts to prevent such infringement by enforcing Intellectual property laws and creating public awareness would instill confidence and respect for intellectual property in Ghana and this would encourage innovation and creativity.  Ghana can provide incentives for science, technology, research, and development which would promote innovation and creativity. It can also foster collaboration among industry players and academia. The government can collaborate with other international organizations to fight the infringement of intellectual property globally. A speedy trial of Intellectual property infringement cases would restore confidence in the system.

 

In conclusion, Ghana has adequate laws to protect intellectual property within its jurisdiction. However, what appears to be a challenge is the enforcement of these laws. The wheels of justice often grind slowly thereby often causing undue delay in seeking redress/concluding matters of intellectual property infringement.  With intentional and directed efforts towards improved efficiency of the judicial system, parties can confidently focus on their creative strengths with an assurance of faster/efficient disposition of cases before the courts in the event of a matter of infringement.

BY; VIDA NARKIE ODONKOR Esq.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Intellectual Property, Energy, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

1. Introduction

Indirect taxes play a pivotal role in Ghana’s fiscal system by providing a stable revenue stream for government operations and public services while distributing the tax burden across a broad spectrum of the population. These taxes, such as value-added tax (VAT), excise duties, and customs duties, generate significant revenue without directly impacting individual incomes, thus ensuring a more equitable distribution of tax liability. Moreover, they serve as potent tools for economic policy, facilitating the regulation of consumption patterns, incentivizing domestic production, and protecting local industries. In the context of Ghana’s evolving economic landscape, the strategic utilization of indirect taxes not only bolsters fiscal sustainability but also fosters economic growth and development.

 

1. Overview of the indirect tax landscape in Ghana

The indirect tax landscape in Ghana presents a multifaceted framework comprising various taxes aimed at generating revenue and regulating economic activities. At its core stands the Value Added Tax (VAT) system, which encompasses both standard and exempted goods and services, thereby structuring consumption patterns and revenue generation. Excise duties further contribute to this landscape by targeting specific goods such as alcohol, tobacco, and petroleum products, serving both revenue and regulatory purposes. Additionally, customs duties play a significant role in regulating international trade, ensuring compliance with tariff regulations, and protecting domestic industries. This comprehensive system of indirect taxation reflects Ghana’s efforts to balance revenue generation with economic regulation and development objectives, albeit amidst the challenges of compliance, enforcement, and periodic reforms.

• Types of Indirect Taxes in Ghana

The types of indirect taxes in Ghana are the Value Added Tax (VAT), the National Health Insurance Levy (NHIL), the Ghana Education Trust Fund Levy (GETFL), Import duties and Excise Duties. The following paragraphs will discuss the various types in detail.

 

1. Value Added Tax (VAT)

Ghana’s Value Added Tax (VAT) system, established under the Value Added Tax Act, 2013 (Act 870) and its amendments, is a consumption tax levied on the supply of goods and services and on imports, with the standard VAT rate set at 15%[1]. Additionally, there is a National Health Insurance Levy (NHIL) of 2.5% and a Ghana Education Trust Fund (GETFund) levy of 2.5%, effectively bringing the total VAT rate to 22% on taxable supplies. Certain goods and services are exempt from VAT, including basic food items, healthcare, education, financial services, and residential property leases and sales, aimed at reducing the tax burden on essential and socially important sectors[2]. Businesses with an annual turnover exceeding GHS 200,000 are required to register for VAT, file regular returns, and maintain accurate records of all transactions to ensure compliance and facilitate audits by the Ghana Revenue Authority (GRA)[3]

 

1. National Health Insurance Levy (NHIL)

The National Health Insurance Levy (NHIL) in Ghana was introduced to provide sustainable funding for the National Health Insurance Scheme (NHIS), which aims to offer equitable and accessible healthcare services to all residents[4]. Implemented as part of the Value Added Tax Act, 2013 (Act 870), the NHIL is set at a rate of 2.5% and is applied to the same taxable base as VAT, encompassing the supply of goods and services as well as imports[5]. Businesses that are liable for VAT are also required to collect and remit NHIL, ensuring that the levy is integrated into the standard VAT compliance framework. Compliance involves the registration of businesses with the Ghana Revenue Authority (GRA), accurate record-keeping of NHIL-related transactions, and the regular filing of returns and payment of the collected levy to the GRA, typically on a monthly basis[6].

 

1. Ghana Education Trust Fund Levy (GETFL)

The Ghana Education Trust Fund Levy (GETFL), established under the Ghana Education Trust Fund Act, 2000 (Act 581), is a tax set at a rate of 2.5% on the supply of goods and services, designed to support educational infrastructure and facilities. The GETFL is collected through mechanisms similar to those used for Value Added Tax (VAT), including business registration, periodic filing, and payment to the Ghana Revenue Authority. The funds generated from GETFL are allocated to the Ghana Education Trust Fund, which is mandated to utilize these resources for the development and maintenance of educational institutions, provision of scholarships, and improvement of teaching and learning materials across Ghana.[7]

 

1. Import Duties

In Ghana, import duties are governed by the Customs Act, 2015 (Act 891) and subsequent amendments, which outline the various taxes and tariffs imposed on goods entering the country. Import duties apply to a wide range of goods, including consumer products, machinery, vehicles, and raw materials, with rates varying based on the type and value of the goods. Generally, import duty rates range from 0% to 20%, depending on the classification under the Harmonized System (HS) code, with essential goods such as certain pharmaceuticals and educational materials often enjoying exemptions or lower rates to promote accessibility and development[8]. Additional levies like the Value Added Tax (VAT), National Health Insurance Levy (NHIL), and the ECOWAS Levy may also be applicable to imports.[9] However, exemptions can be granted for specific categories, such as goods for diplomatic missions, certain agricultural inputs, and items imported under special government programs to encourage industrialization and investment.[10]

1. Excise Duties

Excise duties in Ghana are levied on specific goods produced or imported into the country, primarily to generate revenue and regulate the consumption of certain products deemed harmful or luxurious[11]. The excisable goods include alcoholic beverages, tobacco products, petroleum products, and vehicles, with rates varying based on the type of product; for instance, alcoholic beverages attract rates ranging from 10% to 50%, tobacco products up to 175%, and petroleum products a specific duty per litre[12]. Compliance with excise duty regulations requires manufacturers and importers to be registered with the Ghana Revenue Authority (GRA), maintain detailed records of production and imports, and file monthly returns detailing the quantities and types of excisable goods produced or imported, along with the applicable excise duties paid[13].

 

1. Impact of Indirect Taxes

Indirect taxes play a significant role in revenue generation for the Ghanaian government, contributing substantially to the country’s overall revenue stream[14]. Over recent years, indirect taxes have shown a consistent upward trend, reflecting both economic growth and adjustments in tax policies aimed at enhancing revenue mobilization[15]. These taxes, including Value Added Tax (VAT), excise duties, and the National Health Insurance Levy (NHIL), among others, serve as crucial sources of funding for various government expenditures, including infrastructure development, social services, and public administration[16]. By diversifying revenue sources and reducing reliance on direct taxes, indirect taxes help ensure a more stable revenue base, supporting sustainable fiscal policies and enabling the government to meet its financial obligations and developmental objectives[17].

 

1. Future trends and challenges of indirect taxation in Ghana

Looking ahead, the future of indirect tax administration in Ghana presents both opportunities and challenges. Anticipated reforms may include the modernization of tax administration systems to enhance efficiency, transparency, and compliance, possibly through the adoption of digital technologies and streamlined processes[18]. However, potential challenges such as tax evasion, the informal economy, and changing consumer behaviors underscore the need for robust enforcement measures and capacity-building initiatives to strengthen compliance and revenue collection[19]. Furthermore, emerging trends such as e-commerce and digital services pose unique challenges in taxing intangible goods and cross-border transactions, necessitating international cooperation and innovative tax policies to address these complexities[20]. To adapt to these changes, stakeholders must prioritize capacity-building efforts, invest in technological infrastructure, and engage in dialogue to develop responsive tax policies that balance revenue objectives with economic growth and social welfare considerations[21].

 

1. Conclusion

In conclusion, a comprehensive understanding of indirect taxes is essential for businesses and taxpayers operating within Ghana’s fiscal system. Indirect taxes not only contribute significantly to government revenue but also play a vital role in shaping economic behavior, promoting equity, and funding essential public services. Businesses must navigate the intricacies of indirect tax regulations to ensure compliance, manage costs, and mitigate risks effectively. Moreover, taxpayers benefit from understanding how indirect taxes affect their purchasing decisions, financial planning, and overall economic well-being. Recognizing the dynamic nature of indirect tax regimes and staying abreast of legislative changes and administrative reforms are crucial for both businesses and taxpayers to adapt and thrive in the evolving fiscal landscape of Ghana. Ultimately, a collaborative effort between the government, businesses, and taxpayers is essential to ensure that indirect taxes contribute positively to sustainable economic growth, social development, and fiscal stability in Ghana.

[1] VAT (Amendment) Act, 2022 (Act 1107)

[2] VAT Exemptions Schedule, Ghana Revenue Authority

[3] Ghana Revenue Authority, VAT Registration and Compliance

[4] National Health Insurance Act, 2012 (Act 852)

[5] Value Added Tax Act, 2013 (Act 870)

[6] Ghana Revenue Authority, NHIL Compliance Guidelines

[7] Ghana Education Trust Fund Act, 2000 (Act 581).

[8] Customs Act, 2015 (Act 891)

[9] Ghana Revenue Authority (GRA), Import Duty Rates

[10] Ghana Investment Promotion Centre (GIPC), Import Duty Exemptions

[11] Excise Duty Act, 2014 (Act 878)

[12] Ghana Revenue Authority, Excise Duty Rates

[13] Ghana Revenue Authority, Excise Duty Compliance Guidelines

[14] Ghana Revenue Authority, Tax Revenue Performance Reports

[15] Ministry of Finance, Ghana Economic Outlook Reports

[16] World Bank, Ghana Public Expenditure Review

[17] International Monetary Fund (IMF), Fiscal Policy Reviews in Ghana

[18] Ministry of Finance, Ghana Revenue Mobilization Strategy

[19] World Bank, Ghana Economic Update Reports

[20] Organisation for Economic Co-operation and Development (OECD), Tax Challenges Arising from Digitalization Organisation for Economic Co-operation and Development (OECD), Tax Challenges Arising from Digitalization

[21] Ghana Revenue Authority, Strategic Plans and Policy Documents

 

 

BY; Portia Adjei-Mensah Esq.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Intellectual Property, Energy, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

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Email:info@narteylaw.com

 

 

I.    Introduction

A.  Background on Ghana’s Economy

The Ghanaian economy is often described as one of immense potential and capability. This is because, despite existing for more than six decades, the Ghanaian economy still has many areas and sectors that are devoid of great investment and diverse exposure. With an estimated population of over 30 million people,[1] rankings of 1^st and 2^nd for exports of gold[2] and cocoa respectively across the African continent, one can only wonder what would be possible if sufficient investments were made across all industries.

These possibilities however present a dual-edged sword. The dearth of investments does not only provide a lot of potential but it has also resulted in a lack of political will to effectively regulate large segments of the Ghanaian economy. Thus, the Ghanaian economy has rudimentary regimes on matters like Consumer Protection, Labour Protection, Antitrust Regulation, Environmental Protection and so on and so forth. This leaves ordinary citizens and other stakeholders at risk of exploitation. This article seeks to foray into one of the aforementioned areas to expose the gaps that exist in the regulatory regime.

B.   Importance of Competition Laws

If one randomly asked a Senior High School student what the two types of national economic structures are, most students would easily answer stating Socialism and Capitalism (or a Free Market Economy). Same student would easily say that that Socialism refers to the economic system where the state centralises control of market forces within itself and also controls the distribution of resources with minimal private involvement. Capitalism on the other hand involves minimal state involvement in the distribution and utilisation of resources. Private persons set up companies and legal entities through which they employ other private persons, provide services, and sell goods. The Ghanaian system is oft described as a mixed system since the state maintains control of some sectors of the economy, particularly those that are deemed to be essential (eg. Ghana Water Company Limited or Ghana Broadcasting Corporation).

A feature of efficient Capitalist Systems is state regulation. This is because absolute capitalism (devoid of state regulation) breeds chaos. The primary aim of corporations is the making of profit, and without regulatory oversight, corporations may resort to dubious practices, such as compromising quality assurance by cutting corners, underpaying employees, exploiting resources beyond sustainable limits, engaging in environmental pollution, and employing anti-competitive tactics to stifle potential competitors. The necessity for regulation becomes evident as a means to establish a framework that ensures ethical business conduct, protects workers’ rights, preserves environmental integrity, and promotes fair competition within the capitalist system.

In essence, state regulation acts as a critical counterbalance to the profit-centric motives of corporations, steering them towards responsible and sustainable practices. It serves as a protective mechanism, preventing the negative externalities associated with unbridled capitalism and fostering an environment where economic activities contribute positively to societal well-being.

One such form of regulation is Antitrust or Competition Law. These laws seek to ensure that there exists a level playing field amongst corporations in the market. This sort of regulation takes on many forms. It includes requiring regulatory approval for mergers and acquisitions of dominant players in certain industries, supervising joint ventures carried out by dominant companies to prevent cartel behaviour, preventing firms from bundling their services together to limit consumer choice, and the like.

C.   Statement of the Problem: Market Dominance and Abuse of Power

Antitrust laws are incredibly important to control the excesses of corporate power. Whilst the growth of a company is not wrong by itself, companies can however grow to levels that may generally negatively impact the collective good. A company with access to the primary means of entry into a market may make it harder for new players to enter the said market. Take Amazon, the multinational conglomerate, for example. Amazon primarily operates a virtual marketplace that has become so ubiquitous that essentially every seller or supplier who wishes to provide their goods to the larger market must list their products on Amazon and pay a commission to the site. What happens then when Amazon also starts listing its own products for sale?[3] The small business owner would then be competing with the conglomerate which has excess revenue to enable them undercut the seller and also has algorithms to list Amazon’s products higher in search results and possibly bury the small seller’s products.[4]

For the ordinary consumer, this really does not sound so bad. After all, they would be paying less for the same product. However, the average consumer seldom considers the long-term macroeconomic repercussions. The fewer competing sellers there are in a market, the more the existing sellers are able to control the industry. This control can be abused in various ways. A dominant market player may make government unpopular by frustrating customers. They may increase prices knowing that consumers have no viable alternatives, they may lobby lawmakers to pass rules favourable to them and detrimental to other stakeholders, they may bundle their services into other markets to takeover those markets, and suchlike.

Even outside of abusive practices, there are inherent dangers to a lack of competition in a market. The first of these dangers is a lack of innovation. Competition breeds advancements and innovations in a particular market. Take, for example, the MTN story; a lot of people readily attribute advancements in telecommunications in Ghana to MTN. These include easy access to SIM card registration, Mobile Money and 4G services. All of the foregoing  happened because the company sought to secure an edge over its competitors. Without competition, they would have no reason to try to be better. This is why markets with large numbers of suppliers (think sachet water or public transportation) often have their goods or services remaining cheap since alternatives are readily available to consumers. Relying on only one service is also dangerous since the failure of that service would grind the entire industry to a halt. In essence, a thriving marketplace with healthy competition not only sparks innovation but also ensures resilience and affordability for consumers, underscoring the necessity for vigilant regulatory measures to safeguard the vitality of competition in various industries.

II.    Literature Review

A.  Overview of Competition Laws in Ghana

Antitrust laws in Ghana are unfortunately quite fragmented. As was stated in the introductory part of this essay, there has not been sufficient political will to regulate competition effectively. Thus, what exist presently are mostly sections of laws that can be loosely interpreted as applying to antitrust scenarios. Specific legislations targeted at maximising competition are quite limited.

The 1992 Constitution of Ghana which serves as the basis for the Ghana Legal System does not have a provision dedicated explicitly to antitrust law. It does however provide some general basis for legislating such specific laws. Particularly, under Article 36, the Constitution provides thus:

• The State shall take all necessary action to ensure that the national economy is managed in such a manner as to maximize the rate of economic development and to secure the maximum welfare, freedom and happiness of every person in Ghana and to provide adequate means of livelihood and suitable employment and public assistance to the needy.

 

• The State shall, in particular, take all necessary steps to establish a sound and healthy economy whose underlying principles shall include –
  1. affording ample opportunity for individual initiative and creativity in economic activities and fostering an enabling environment for a pronounced role of the private sector in the economy;

 

• The State shall afford equality of economic opportunity to all citizens; and, in particular, the State shall take all necessary steps so as to ensure the full integration of women into the mainstream of the economic development of Ghana.

Specific to education, also, is Clause 2 of Article 25 which states:

• Every person shall have the right, at his own expense, to establish and maintain a private school or schools at all levels and of such categories and in accordance with such conditions as may be provided by law.

Reading these provisions purposively may provide basis for the enforcement of Antitrust Legislation since such legislation, as has been stated above, is fundamentally targeted at ensuring that the market is free and open to all persons who wish to participate in same whilst preventing unjustified monopolies.

As has already been stated, Ghana’s regime on antitrust law is quite fragmented. This is because they exist only within certain sectors. One such law is the Protection Against Unfair Competition Act, 2001 (Act 589). This Act, although aimed at ensuring fair market practices, focuses on the use of intellectual property to restrict the business of another. Primarily, it focuses on the use of the image or likeness of the intellectual property of another business in a manner that is inconsistent with fair business practices. It also creates a civil remedy for actual or threatened breaches of the act by way of application to the court by the victim.[5] Even with regard to intellectual property, the applicability of the Act is still very limited. It focuses on scenarios where one person uses the intellectual property of another, but it does not particularly address scenarios in which the owner of the property uses the Intellectual Property to prevent others from entering the market.[6]

One would also expect the Companies Act, 2019 (Act 992) to have some degree of regulation since it is the general enactment that regulates companies in Ghana. This is not the case unfortunately. The Act does not provide any specific limitations on corporate power to prevent anti-competitive behaviour. One common antitrust tactic is the acquisition of smaller competing firms by dominant companies. It is quite unfortunate to note that the limitations that exist in the act for mergers and acquisitions do not consider the possibility of them being anticompetitive. Thus, any form of regulation regarding such processes will be sector-specific.

It is therefore left to regulators of specific industries to make attempts at regulating against anticompetitive practices. Hence, Section 54(3) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930)[7] gives the Bank of Ghana the discretion to deny an application for approval of sale of businesses, mergers, amalgamations, or reconstructions of the institutions within the scope of the Act[8] if, in the opinion of the BoG, such a transaction would have substantial effects on competition in the sector.

Additionally, the new Insurance Act, 2021 (Act 1061) which establishes the National Insurance Commission mandates, under Section 4(e), the Commission to be guided by the need to ensure effective competition in the insurance sector in the best interest of consumers. The Act further requires the approval of the Commission for mergers or acquisitions under Sections 85 to 88. A combined reading of Section 4(e) and 88 provides strong indication that the need to promote competition would constitute basis to reject an application brought under Section 85.

An even better example is the National Petroleum Authority Act, 2005 (Act 691)[9] which establishes the National Petroleum Authority as the regulator of corporations in the Petroleum Sector, an industry that is arguably noted historically for anticompetitive practices. The Act empowers the Authority to specifically take action against cartels and monopolies under Section 43.

Another regulator, the National Communications Authority, also has the authority to review corporate activity in a manner that encourages competition in the market. The Electronic Communications Act, 2008 (Act 775)[10] stipulates in its sections a general duty on all licensees under the Act not to engage in anti-competitive practices and further stipulates, unlike the aforementioned enactments, additional specific duties that must be undertaken by companies determined to be Significant Market Players to maintain some fairness in the system. Also, unlike the other sector regulators aforementioned, it seems the NCA has been the only one to specifically enforce the rules on anticompetitive behaviour.[11] A counter to that would be the argument that the wording of Act 775 creates a specific statutory duty on the regulator to so act and it thus was not really a matter of choice.

B.   Decided Cases on Competition

Most of the case law in Ghanaian courts on competition relate to the application of the Protection Against Unfair Competition Act, 2001 (Act 589) or the tort of passing off. Cases including Prophetess Thane II v. Prophet George; [12] Interworld Products (GH) Ltd. V. Lava Limited;[13] PRG Watch Manufacturing Limited v. Joseph Attakora;[14] Fruit Basket Ltd v. I-Shop Ltd;[15] Kapman AB v. Simater Company Ltd;[16] Living Faith World Outreach Centre & Ors V. The Registrar-General & Ors[17] relate to the tort of passing off which entitles a plaintiff to a claim of damages where the plaintiff is able to successfully prove that the defendant has unduly employed the likeness of the plaintiff’s business in order to benefit from the goodwill of the defendant in the market.  As was stated earlier, this is also provided for under Act 589. Other relevant cases, including Accra Brewery Company Ltd. v. Guinness Ghana Ltd,[18] are on contracts in restraint of trade where two parties enter into an agreement limiting the right of one or both parties to purchase from or sell to third parties to the agreement. Although, passing off and trade restraints may be forms of unfair competition, they do not fall squarely within the anti-competitive measures discussed in this essay which involve a larger company taking advantage of its dominant position to unduly disadvantage its competitors.

These were the essential facts that led to the decision of the Court of Appeal in Ghana Telecom Company Ltd. Vs. Internet Ghana Ltd (Consolidated).[19] The brief facts of this case are that the parties entered into an agreement where the Appellant would support the Respondent with its technical services and equipment to enable the Respondent to provide internet service to consumers. Notably, at the time the contract was entered into, the Appellant party had not been providing retail internet services to the general public. However, not long after, the Appellant did in fact begin to provide such services even going as far as providing them for free to consumers in a bid to get consumers to choose its services over those of the Respondent. Without delving too greatly into the issues determined in the matter, it is quite clear on the face of it that the Appellant partly was abusing its dominant position since it was obviously better placed to provide such services over the Respondent who, in addition to paying hefty service charges, now had to contend with a competitor who was providing the same services for free, and this was obviously injurious to its business. It is also instructive to note the dictum of Adjei J.A. where, in dismissing the appeal and upholding the decision of the trial court in favour of the Respondent, he points out that the actions of the Appellant could not be sufficiently covered by Act 589 and that, if anything, only the omnibus ground under Section 7 could be interpreted to cover the actions of the Appellant. It is unclear if the learned Justice of the Court of Appeal intended to point out the limitations of the Act, but nevertheless, the case demonstrates the deficiency of the Act.

C.   Global Perspectives on Addressing Market Dominance

Addressing market dominance through an effective antitrust regime has become a relevant feature in economies that are at the upper end of the development scale. Such states recognise the dangers posed by unchecked corporate power. They understand that, similar to unchecked state power, the innate human desire to collect power and strength will motivate corporate power to trample on the freedoms and interests of others. Accordingly, these states have implemented regulatory regimes to ensure that corporate power is not unfettered.

The absolute trailblazer in this area of law is the European Union (EU). Arguably, antitrust regulation is even more relevant for a supranational economic structure such as the EU where market dominance in the single market poses an even greater risk for all others. This is why the Treaty on The Functioning of The European Union[20] dedicates an entire chapter[21] to encouraging competition. Thus, the Union, particularly through the European Commission,[22] takes steps to ensure the market is kept competitive. A good example of such regulatory activity is the passing of the Digital Markets Act which is meant to regulate firms within the digital space. Under this Act, a company may be characterised or designated as a “gatekeeper” with such designation being accompanied by certain duties to avoid activities that prevents competitors from participating in the market or disincentivising customers from switching to competitors. Apple, the US-based international tech giant, was recently compelled to adopt certain changes from the Union including allowing side-loading[23] and greater third-party software access to devices in the European Union.[24]

The United States of America (US)is quite obviously worthy of consideration. The US practices a dual-agency system with both the Federal Trade Commission (FTC) and the US Department of Justice (DOJ) acting as enforcers of antitrust laws in America. The FTC often takes an oversight role, assessing transactions for compliance with antitrust laws, but it may still take action against firms that have acted contrary to best practice through fines. The DOJ on the other hand often takes on prosecutorial roles and often only steps in with matters involving significant criminality like the infamous Vitamin Cartel in the 1990s.[25] The statutory regime for regulating antitrust conduct in America is three-fold. First, there is the Sherman Act of 1890 which prohibited malicious anti-competitive behaviour across state lines and was used in notable cases such as the United States v. AT&T[26] and the United States v. Microsoft.[27] The Sherman Act was then followed by the Clayton Act of 1914 which was more specific in stating the anticompetitive behaviour (such as price discrimination and mergers and acquisitions) and providing further protections for Labour Rights. The final[28] Act that provides the basis for regulation of Anticompetitive behaviour is the Federal Trade Commission Act of 1914 which established the FTC and provided further regulatory powers over corporate power.

In Africa, South Africa also stands as a pioneer in competition regulation with its proactive regime for preventing antitrust behaviour. The Competition Commission of South Africa as established by the Competition Act No. 89 of 1998 oversees corporate transactions for their effects on competition. The Act also prohibits anti-competitive conduct in both broad and narrow terms. The Act even goes further in establishing a Competition Tribunal and a Competition Appeals Court with three judges of the High Court. The Commission undertakes many activities including providing guidelines on mergers and acquisitions,[29] conducting probes into financial manipulation by banks,[30] amongst others.

III.    Analysing Gaps in Current Legislation and Proposing Reforms

A.  Weaknesses in Definitions and Thresholds

The main issue with the Ghanaian regulatory framework lies in its fragmentation, which undermines effective antitrust enforcement. Currently, only certain regulators are empowered to address antitrust behaviour, leading to significant gaps in oversight across various sectors of the economy. Moreover, even the existing sector-regimes are still very incompetent. As stated above, it is only the Electronic Transactions Act (Act 775)[31] that specifically stipulates thresholds for determining market dominance and further compels the dominant company to take specific steps to ensure fairness. This is a huge problem as an economy is obviously not only comprised of Telecommunications Companies. Given that antitrust behaviour can manifest in any industry, the absence of comprehensive statutory provisions poses a significant challenge for regulators in identifying and combating such practices. Consequently, the current regulatory landscape in Ghana lacks the requisite tools and authority to adequately tackle antitrust issues, resulting in an overly laissez-faire approach to competition enforcement.

Additionally, firms may grow so large that they are able to branch into other sectors. When this happens, a fragmented approach would mean that they would be partly under one regulator and under another (if that regulator has antitrust powers). Take Samsung in South Korea, for example, Samsung provides services in construction, the more popularly known consumer electronics, financial services, shipbuilding, and medical services. In a fragmented regulatory environment like ours, such a conglomerate would fall under the jurisdiction of multiple regulators, each with varying degrees of antitrust authority. This would lead to bureaucratic hurdles and inefficiencies as regulators attempt to share information and coordinate efforts to identify and address anticompetitive behaviour.

 

B.   Enforcement Challenges

The second limitation of the Ghanaian regime relates to the regulators themselves. This particular limitation is two-pronged. The first being a consequence of the aforementioned fragmented issue. An assessment of the competition regimes from other jurisdictions indicates that there is often a dedicated statutory body that monitors and regulates all parts of the economy for antitrust behaviour. The United Kingdom has the Competition and Markets Authority (CMA),[32] Australia has the Australian Competition and Consumer Commission (ACCC),[33] Japan has the Japan Fair Trade Commission (JFTC),[34] Nigeria has the Federal Competition and Consumer Protection Commission (FCCPC),[35] among numerous others. Some countries like the US, South Africa and some Member States of the EU even have multiple agencies tasked with combating anticompetitive behaviour. It is therefore quite disappointing that no such agency or commission exists presently in Ghana to protect anti-competitive behaviour.[36]

The second prong of the enforcement problem is a lack of political will. The creation of bodies and formulation of policies, no matter how comprehensive will be immaterial without the necessary political will to accomplish these goals. This lack of will is evident firstly by the absence of sufficient statutory backing. Furthermore, as demonstrated by the NCA-MTN fiasco, regulatory enforcement against companies particularly those that employ and/or provide services for a significant portion of the population can very easily result in public dissatisfaction. This dissatisfaction can easily turn into disdain for the government of the day thus disincentivising the state from even taking regulatory action against a company.

 

C.   Inadequate Penalties for Violations

As stated prior, the absence of strict legislation in the Ghanaian Antitrust space provides no incentives for companies to conduct themselves in a manner that encourages competition. Other regimes have laws that provide regulators with broad swathes of action that can be undertaken against companies subject, of course, to judicial review. These regulatory measures include blocking transactions and acquisitions, ordering the breakup of companies that have grown too large, requiring significant players to grant their competitors access to proprietary tools and technology, amongst others.

There is also, quite obviously, criminal prosecution for those who engage in more egregious instances of anti-competitive behaviour such as the aforementioned Vitamin Cartel. These regulatory measures serve as strong incentives to companies to play fair with each other. Companies cannot be left to conduct themselves as they please in a market; some degree of regulation is necessary.

D.  Lack of Protection for Domestic Firms

There is also the need to improve the current regime to better protect indigenous businesses. Admittedly, the Ghana Investment Promotion (GIPC) Act, 2013 (Act 865) was passed for this same purpose. It is humbly submitted that all the act does with regards to protecting indigenous businesses is to reserve certain industries for domestic businesses and impose Ghanaian participation requirements for certain industries. It should go without saying that this is woefully inadequate as a foreign firm with cashflows far greater than Ghanaian companies can still abuse the present system to the detriment of competition in the market. It is therefore further relevant to shore up our regime on competition laws.

IV.    Conclusion

As pointed out in this essay, the Ghanaian regulatory regime on Competition in the Free Market is woefully inadequate. This inadequacy manifests by way of fragmented enforcement, a dearth in political will and a lack of punishments for unethical activity. This leaves the economy and its particular industries quite vulnerable to the whims of corporate greed. It is extremely important that the regime is shored up and the necessary checks are put in place to protect against manipulation. This is especially important in light of the establishment of the AfCFTA as a means of ensuring that the resources of the Continent are primarily enjoyed by people of the Continent.

This article is by no means a first in calls for a better regulatory system. Appeals have consistently been made by experts in the field and civil society organisations for the necessary legislative action to implement a robust economy.[37] In 2019, the then Minister of Trade and Industry stated that Cabinet was considering a draft Competition Bill meant to be aligned with the provisions of the Competition Protocol of the second phase of negotiations the AfCFTA.[38] Unfortunately, such a bill has yet to result in an Act of Parliament. And with this article being written in an election year, it cannot be said that there is much to go on in the nature of hope to see such an enactment passed anytime soon. One would always hate to be a harbinger of doom and dread, but the urgency with which such regulation is required cannot possibly be overstated. Industries are ripe for the picking by corporations that have the means to take advantage of the lax nature of the regulatory system. Thus, this author can only join his voice to the many others that have called for the same thing- Regulation.

[1] Ghana Statistical Service, 2021 Population and Housing Census: General Report, Volume 3A, November 2021. Accessible from <https://statsghana.gov.gh/gssmain/fileUpload/pressrelease/2021%20PHC%20General%20Report%20Vol%203A_Population%20of%20Regions%20and%20Districts_181121.pdf>

[2] Mining.com. (2021, June 14). Top 10 gold producing countries. <https://www.mining.com/web/top-10-gold-producing-countries/>

[3] As they presently do with their Amazon Basics line of products.

[4] See Farronato, C. (n.d.). Understanding the Tradeoffs of the Amazon Antitrust Case. Harvard Business Review. https://hbr.org/2024/01/understanding-the-tradeoffs-of-the-amazon-antitrust-case#:~:text=The%20FTC’s%20complaint%20alleges%20that,abuse%20of%20a%20dominant%20position.

[5] See Section 8 of Act 589

[6] Although Section 7 provides an omnibus provision to allow applications for activities in the course of

industrial or commercial activities that are “contrary to honest practices”.

[7] Per the long title, the Act was enacted to: “amend and consolidate the laws relating to deposit-taking; to regulate institutions which carry on deposit-taking business, and to provide for related matters.”

[8] Per Section 1 of the Act, it applies to (a) banks, (b) specialised deposit-taking institutions, (c) financial holding companies, and (d) affiliates of banks, specialised deposit-taking institutions, and financial holding companies.

[9] The long title of the Act states that it was enacted to: “establish the National Petroleum Authority to regulate, oversee and monitor activities in the petroleum downstream industry; to establish a Unified Petroleum Price Fund; and to provide for related matters.”

[10] As amended by the Electronic Communications (Amendment) Act, 2019 (Act 1006)

[11] See < https://nca.org.gh/2020/09/01/high-court-dismisses-mtns-case-contesting-the-ncas-decision-to-declare-them-as-a-smp-in-ghana/>

[12] [1977] 1 GLR 467

[13] CA. 34/2003 · 16 FEB 2004 · Unreported, Court of Appeal)

[14] Suit No: MISC/22/12 · 17 OCT 2013 (Unreported)

[15] Suit No: IPR/05/14 · 30th May 2017 (Unreported)

[16] Suit No: CM/IPR/0522/18 · 29 JUN 2021 (Unreported)

[17] Suit No: J4/49/2021 · 17 MAY 2023 · (Unreported)

[18] Suit No: CS 307/99, 28^th May 1999. (Unreported)

[19] Consolidated Suit No: H1/82/2022, Appellate decision of 5th December, 2022 (Unreported)

[20] The Treaty on the Functioning of the European Union (TFEU) is one of the two main treaties that form the constitutional basis of the European Union (EU), along with the Treaty on European Union (TEU).

[21] CHAPTER I of TITLE VII of The Treaty on The Functioning of The European Union

[22] The European Commission acts as the second organ of the Executive arm of the European Commission.

[23] Sideloading refers to installing applications from web sources that are not vendor-approved. Apple approves only apps installed through its App Store which allows it to take significant commissions from developers. Side-Loading would allow developers to offer their apps on the internet thereby circumventing such fees.

[24] https://www.reuters.com/technology/apple-faces-strong-action-if-app-store-changes-fall-short-eus-breton-says-2024-01-26/

[25] See Molitor N, “The Rise and Fall of the Vitamin Cartel – Dr. Rath Health Foundation” (Dr. Rath Health Foundation, November 11, 2020) <https://www.dr-rath-foundation.org/2019/09/the-rise-and-fall-of-the-vitamin-cartel/>

[26] United States of America v. AT&T Co. 552 F. Supp. 131 (D. D.C. 1982).

[27] United States of America v. Microsoft Corporation, 253 F.3d 34 (D.C. Cir. 2001)

[28] Other enactments do exist including the Robinson–Patman Act of 1936, Celler–Kefauver Act of 1950, the Hart–Scott–Rodino Antitrust Improvements Act of 1976 but these amended existing laws.

[29] Nazeera Mia. (2022, February 9). Africa: Competition Law – A year in Review, 2021 – Bowmans. Bowmans – Corporate and Commercial Law Firm | Corporate Lawyers | Attorneys. https://bowmanslaw.com/insights/competition/africa-competition-law-a-year-in-review-2021/

[30] MSN. (n.d.). https://www.msn.com/en-za/news/other/competition-commission-presses-ahead-to-concourt-with-currency-manipulation-case-against-banks/ar-BB1hSENn

[31] And the National Petroleum Authority Act, 2005 (Act 691) to some extent

[32] As established by the Competition Act 1998

[33] As established under the Competition and Consumer Act 2010 (CCA)

[34] As established by the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, Act No. 54 of April 14, 1947 (otherwise known as the Antimonopoly Act)

[35] As established by the Federal Competition and Consumer Protection Act, 2019

[36] Although the argument could be made that institutions like the Ghana Standards Authority, the Bank of Ghana and the Public Utilities Regulatory Commission amongst others are meant to undertake consumer protection.

[37] See for example the Ghana News Agency story of 30^th March 2023 titled “Ghana must enforce competition law without delay – Stakeholders.” <https://gna.org.gh/2023/03/ghana-must-enforce-competition-law-without-delay-stakeholders/>

[38] https://www.ghanaweb.com/GhanaHomePage/business/Competition-Law-being-considered-by-cabinet-Trade-Minister-774735

 

 

BY; Kekeli Dzeketey Esq.

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Intellectual Property, Energy, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

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