Investing in the future: from waste to opportunity

In a world that is - fortunately! - increasingly attentive to the environment and sustainability, the eco-sustainable recycling sector is establishing itself as one of the most promising markets, globally considered. Advanced technologies, stricter environmental regulations, and growing consumer and business awareness are turning material recycling into a real investment opportunity.

From the intelligent recovery of electronic waste to the valorization of plastic materials, up to the circular management of resources in developing countries, as of today, investing in international projects related to recycling not only means generating profit, means actively contributing to the ecological transition.

In Ghana, proper waste disposal is one of the main problems: e-waste, fast-fashion, and food waste are major national challenges.

Therefore, it is necessary to pay attention to the main regulations in the sector, but especially to the tax benefits and the most effective financial instruments for those who want to invest responsibly and farsightedly in Ghana.

Regarding the legislation, it is important to note that Ghana is a party to the Basel Convention (1992) on the control of transboundary movements of hazardous wastes and their disposal, as well as it is part of the Bamako Convention (1998). Both conventions aim to protect vulnerable countries, such as Ghana, from exploitation through the import of hazardous waste. However, enforcement is often limited and ineffective.

Accordingly to the contractual obligations, the "Hazardous and Electronic Waste Control and Management Act", 2016 (law 917) (E-Waste Act) has been approved to regulate the treatment of hazardous, electronic, and electrical waste. In addition to the E-Waste Act, the "Hazardous, Electronic and Other Wastes (Classification) Control and Management Regulation", 2016 (LI 2250) provides comprehensive guidelines on waste classification, control, management, waste disposal, and a number of other issues.

Accra Center, Ginger Association

TAX ADVANTAGES

In Ghana, recycling companies - particularly those involved in waste processing, including the recycling of plastic or electronic waste - benefit from significant tax incentives.

The main tax benefits are:

The reduced corporate income tax rate (CIT): for waste processing companies, up to 7 years from the start of business, the tax rate is only 1% on taxable income, instead of the usual 25%.

Tariff exemptions on machinery and equipment: Companies can import duty-free machinery and plant, simplifying the start-up and expansion of recycling activities.

There are incentives in the Free Zones; in fact, if the companies are registered in "Free Zones", they may be given: total exemption of CIT for the first 10 years; thereafter, only 15% on export profits and 25% on local sales. Not to mention, withholding tax on dividends as well as exemption from import/export duties.

Furthermore, manufacturing companies operating outside of Accra or Tema can benefit from additional location-related tax incentives by accessing a reduction in the corporate income tax rate (CIT), which may fall from 25% to 18,75%, or in some cases even lower.

In addition to general tax incentives, Ghana offers specific measures dedicated to the recycling sector to attract responsible investment and promote sustainable waste management. A key starting point is the Hazardous and Electronic Waste Control and Management Act of 2016, accompanied by regulations LI 2250. This legislation sets a clear standard for e-waste management, promoting both environmental compliance and investments in modern and enabled facilities.

Internationally, the country is supported by projects such as the World Bank PROBLUE, which supports the development of plastic recycling through EPR (Extended Producer Responsibility) guidelines and proposals for targeted tax incentives.

In practical terms, investors in the recycling sector can count on concrete benefits:

Among the main advantages for investors in the recycling sector in Ghana, there is, first of all, the possibility to access a company income tax (CIT) reduced to 1% for an initial period of seven years, provided that the activity falls under the category "waste processing".

In addition, there are important duty exemptions for the import of machinery and equipment, which significantly reduce start-up and modernisation costs.

For those who want to export, the Free Zones are particularly advantageous, offering a package of tax and economic benefits dedicated to companies oriented to the international market. No less important are the facilities linked to the location: operating outside large urban centers such as Accra or Tema allows additional savings in the long term, thanks to differentiated tax policies.

All this is supported by a well-structured regulatory framework, designed to support both the recycling of electronic waste and plastic, thus favoring investments in line with international environmental standards. Finally, the presence of international initiatives and collaborations - such as those promoted by the World Bank - makes it possible to enhance the existing regulatory framework, paving the way for additional facilities and forms of strategic cooperation.

A worker in Accra, Ghana, by Ginger Association.

Advices for each interested entrepreneur:

1. The first thing to do is contact the Ghana Revenue Authority (GRA) and the Ghana Investment Promotion Centre (GIPC) to verify and apply for incentives.

2. Secondly, it's important to consider settling in the Free Zones or less central regions.

3. After that, it's wise to map all the regulatory requirements (such as: EPA licenses, Electronic Waste Compliance Act 917).

4. And ultimately, investigate any future incentives linked to EPR schemes, already discussed in international workshops.