BY ANTHONY SEDZRO
Foreign investors are still interested in investing in Ghana, the economic challenges the country is experiencing notwithstanding. Ghana has unique attractions not found in other West African countries, making the country a favourite destination for Foreign Direct Investment (FDI). Despite Ghana’s energy challenges in the past few years which reduced the country’s Gross Domestic Product (GDP), foreign investors’ interest is intact.
Vish Ashiagbor, Country Senior Partner for PricewaterhouseCoopers (PwC) Ghana Limited, revealed these in an interview with GB&Fafter he spoke at Standard Bank’s West-Africa Trans-Regional Conference held in Labadi Beach Hotel, Accra, on October 4. South African-headquartered Standard Bank is the biggest bank in Africaand trades in the rest of the continent as Stanbic Bank. Its Ghana subsidiary, Stanbic Bank Limited, hosted the conference. That was the first of its kind was successfully held in Kenya last April and it was attended by clients from Tanzania, Uganda, Zambia, Malawi and South Africa.
Ashiagbor gave the reasons why Ghana is still attractive to investors: “Much as we have had challenges [there are] two things. First, relatively speaking, Ghana’s infrastructure is better than most other countries in Africa, and certainly in West Africa. So if you talk about the challenges we have had with electricity, in the biggest economy in West Africa which is Nigeria, you will find that they have also had challenges; and in many cases theirs is even more significant than ours. Cote d’Iviore has a pretty good system where there are minimal outages as far as electricity is concerned. But if you go to countries further west like Liberia and Sierra Leone which are coming out of conflict and are still building, their situation is also more difficult than ours.”
He continued: “But then you talk about transportation, road infrastructure, aviation and other modes of transport, I think in all cases you will find that Ghana is not doing too badly. Apart from that, there has been a lot of effort put in by not just policy makers or government but even private business to develop the environment and to make it friendlier for investors … So I don’t think our situation scares investors, I think that, on the contrary, with the initiatives that are in place, from the policy point of view, with the involvement of the private sector in the economy, the business-friendly regulations and laws and the increasing use of technology which promotes transparency, and all that, I think the environment is becoming more attractive for investors. Yes, we’ve had challenges of the economy with the fiscal deficit, exchange rate instability, but I am sure you’ve been a witness to the fact that those have actually improved in the last couple of years. So putting everything together, I don’t see that investors should be scared. The work that we [PricewaterhouseCoopers] do, we still see a lot of investor interest in Ghana.”
Speaking at the conference on ‘Regional Economic Overview,’ he revealed that data from the African Development Fund showed economic growth in West Africafell to 3.5 per cent last year, compared to 6 per cent in 2014. This year, however, it is projected to grow by 4.3 per cent. According to Ashiagbor, the key opportunity-bearing sectors which investors could exploit were power, telecommunications and ICT, infrastructure, oil and gas, manufacturing and agriculture.
Investors typically tend to hold back in election years in Africa because of uncertainties during the aftermath. GB&F asked Ashiagbor if he thought investors would develop a wait-and-see attitude before Ghana’s December 7 elections. “I think the wait-and-see approach that investors adopt is not unique to Ghana. It happens all over the world. The USA is going into an election and there is a significant amount of uncertainty as to the policy direction as far as the economy is concerned depending on who wins. There will always be some of that but Ghana specifically, what works in our favour is that over the last many years since 1992, we’ve persistently improved in terms of our democratic credentials,” he stated.
“Therefore the election this year, relative to previous elections, the environment is not too heated. Life goes on, business is going on and so I think investors are looking at our track record and are forming or have formed the view that the risks related to the elections is reduced. It’s not gone, it’s still there but the risk of business disruption, for example, is reduced significantly. The risk that remains is risk around policy direction and what a new government may choose to do. When I say a new government I don’t necessarily mean a different political party taking over government. Governments come and go and coming and going policy decisions may also change,” Ashiagbor hinted.
“Again one of the things that gives confidence to investors that Ghana has fortunately been good at is that investor rights are protected. So once an investment is made, once a decision is made based on a certain policy or legal framework that existed at the time, it is very unlikely that anyone will come and overturn that. Maybe, going forward, things might be different. For example, a tax regime may changeand certain tax breaks that certain investors had in the past may no longer be available. But it’s very unlikely that a new government will come and reverse everything that was previously done,” he explained to GB&F.
Craig Bouwer, Executive Head, Personal Banking, Rest of Africa (RoA) at Standard Bank, spoke to GB&F about the rationale for the conference.“Because there is a growing middle market and consumer market across our various countries and we see this as a massive opportunity to partner with our key commercial and corporate stakeholders to facilitate the banking of their employees,” Bouwer said. He went on: “One of the benefits of having a conference like this is that it allows our clients to network with each other and to explore growing opportunities across the region. Through this collaboration and partnership, they are able to grow their businesses more effectively and we seek to partner with them going forward, ensuring successful growth of their businesses.”
Some of Standard Bank’s commercial banking clients from Ghana, Nigeria, Angola, Cote d’Ivoire and South Africa and other countries partook in the conference. Tunji Adeyinka, an invitee, is the CEO of Connect Marketing Services in Lagos, Nigeria, and a customer of Stanbic IBTC, told GB&F about his company’s reasons for attending the conference.“One of the things we seek to do is to show other companies like ours the kind of benefit we enjoy from our relationship with Stanbic. Companies like ours tend to look for finance to grow our business. And if you have a relationship with a bank that is able to supply you with the kind of finance that you need and they’ve done that consistently for nine years and so when they invited us, we thought it will be nice and come and tell other people [about our success],” Adeyinka said.
He said: “This is because for Africa, Nigeria or Ghana to get out of poverty we need to grow jobs, to grow jobs we need to grow businesses, to grow businesses we need to support ourselves and also tell other people the areas where they can get support. That is the first reason why we are here. The second reason is also to network, meet other people who may need our services. Being a client of Stanbic, the bank looks out for opportunities for their clients.”
Adeyinka, whose company has opened a branch in Accra, said Ghana was a strategic fit for Connect Marketing Services and they are hopeful of positive outcomes from the conference.“Ghana never ceases to amaze me. I haven’t been here since May last year and I have seen the infrastructure development, the airport [arrival hall refurbishment] and the roads. Very importantly are the order and the investment in tourism; and from the things we have heard from the GIPC [Ghana Investment Promotion Centre] and the Minister [for Trade and Industry] as to what the government has been doing. I am very encouraged that we can do great things in Africa and West Africa in particular,” he said confidently.
Dr Ekwow Spio-Garbrah, Minister for Trade and Industry, speaking on the topic ‘Doing Business in Ghana,’ said that Ghana and South Africa had the same industrial capacity in 1960 and the latter produced almost everything it needed locally. Dr Spio-Garbrah said, however,that had changed for Ghana, and he appealed to Stanbic Bank and investors to look at investing in gold refinery and jewellery making, automobiles, agriculture and in tourism. He said the country had competitive advantages in infrastructure, high electricity penetration per population and an educated workforce. He said South Africa needed to open its market to allow other African countries to do business with it.“I think it is in South Africa’s own interest to open up and allow competition from other parts of the continent just as we also allow them to compete here in Ghana. They don’t easily license banks, for example. It has about four to three mainstream banks in South Africa, whereas there are 30 in Ghana. So as we have allowed Stanbic to operate here, if a UniBank or Zenith wants to open in South Africa, they will have a hard time,” Spio-Garbrah said in an interview with journalists after he spoke at the conference.
There were presentations on doing business in Nigeria, Cote d’Ivoire and Angola and the opportunities available in those countries. Some of the speakers at the conference included Alhassan Andani, Managing Director of Stanbic Bank Ghana Limited; Zweli Manyathi, Head of Personal and Business Banking at Standard Bank; Dr Olajumoke Oduwole, Special Advisor on Trade and Investment to President Mahamudu Buhari of Nigeria; Dr Wenbin Wang, CEO of the Industrial and Commercial Bank of China Africa; Yinka Sani, Chief Executive of Stanbic IBTC of Nigeria; and Segun Awolowo Jnr., CEO of Nigerian Export PromotionCouncil.