The Ghana Investment Promotion Center (GIPC) says it will soon publish details of its review of criteria and requirements for foreigners who wish to invest in the country.
Currently foreign investors who wish to invest in Ghana are required to provide a capital limit of $200,000 for joint ventures with Ghanaian companies, while foreign companies that are fully owned by non-Ghanaians must provide 500,000 dollars in capital.
Speaking to journalists after a breakfast meeting with investors and heads of missions in Ghana, the Chief Executive Officer of the GIPC, Mr. Yoofi Grant hinted that the new laws will look at the impact Foreign Direct Investments (FDI)on local companies.
“The review of the GIPC [law] is a very interesting. There are many parts of the law which we think we could look at again to attract investors into the market. One that is a bit controversial is the capital limit, that says that if you are in joint venture with a foreigner the foreigner needs to demonstrate a minimum inflow of $200,000 and if it is a foreign company that wants to be 100 percent owned, we should bring a minimum capital inflow of $500, 000 and for trade $1,000,000. It has a reason for being there, but is that reason still valid? Has it been helpful in getting our companies to grow up and become as big?,” he asked.
Mr. Grant was of the view that it will be prudent to fully assess the impact of the laws over the years to redirect its focus.
“My belief, and from the literature and the research we are doing it is not. So we need to take a relook at that law and open up and say that, no we will still say that if you can invest here, bring in the minimum in whatever figure it is. Let the companies come and invest in the country. There are companies that may come with the minimum investment of say $100,000 for example in the IT business but they come and employ 200 people, but because they will not meet the minimum capital, they will not come,” he observed.
Recommending some measures, Mr. Grant maintained that the issue must be thoroughly discussed and addressed to provide a win-win situation for both foreign investors and Ghanaian business owners.
He reiterated the need to always consider global trends when formulating laws to make Ghana competitive since investors will move to alternative countries that provide cheaper cost of doing business.
“So those are the kind of things we need to talk about. Bear in mind we are also comparing ourselves to our neighbors, Cote d’ivoire, Nigeria, how can Ghana best position itself to be the main attraction center for West Africa,” he said.