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 GHANA FREE ZONES BOARD
Interview with
Mr. Dan Abodakpi,
Deputy Minister of Trade & Industry
October 13th 1999
Contact :
The Secretariat of Ghana Free Zones Board
P.O.Box M 626 , Accra - GHANA
Tel: (233 21) 670 532- 670 534 – 680 533
Fax: (233 21) 670 536
E-mail: gfzb@africaonline.com.gh
Web-site: www.ghanaclassifieds.com/gfzb
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Could you give us a brief historical background of Ghana Free Zones Board?
The Free Zones Program was conceived as a response to the need to intensify Ghana’s attractiveness in terms of the offers that it needs to attract direct foreign investments. It came after we had put in place the various aspects of the Economic Recovery Program which put mechanisms in place to ensure stable and sustainable macro- economic environment and also after a lot of investments had gone into the National Economic Infrastructure Developments. But after all these investments we were not as visible, internationally, as we thought we ought to be. In reexamining some of the strategies that needed to be adopted we decided that perhaps the Free Zones Program could be an important strategy that we could initiate as part of the larger national program to become more visible. Hence the idea of the Free Zone Program. To implement this program the National Free Zones Board was put in place after the initial feasibility and wide ranging work was done to ascertain Ghana’s ability to institute and operate a free zone board and the nature of the free zone arrangement that we ought to have.
The Free Zones Board membership is made up mainly of people from the private sector. We have the Ministry with the Minister chairing, then we have representatives from the Private Enterprise Foundation, individuals with proven entrepreneurial and marketing know-how. The Ghana Free Zones Program is a unique one in various respects; we learnt from the experiences of other free zone programs the world over and extract that which we think would be a true response to the challenges that we face.
We have a 3 dimensional program in nature; the Export Promoting Zone concept, Free Ports and Liberalized Skies within the context of the bilateral air agreements that Ghana will be entering into with various countries. The Export Processing Zone is divided into 2. We had as a concept to promote single factory free zone development throughout the country. Then at the same time we decided to promote free zone enclave developments which is based on the acquisition of a geographical area by government who then invites private developers and make that land available to the developer. The developer, having developed both infrastructure and factories, is free to lease that factory to operators. The government itself is not going into the on-sight infrastructure development, but it is facilitating the process by putting basic utilities within the confines of the enclave; water, telecommunication, electricity.
In coming up with this strategy we took into account our economic circumstances, that we could not burden the central government budget with what we consider to be considerable investments into that kind of activity, bearing in mind that some countries have failed with this strategy. When land is leased to a developer it becomes a joint agreement between he and the government represented by the Free Zones Board to promote the investments that have been developed. When we started this many people thought it was not going to work, and we even had to convince the World Bank that it was going to work. Now they have teamed up with the government to develop the off-sites infrastructure.
We have been able to attract a major developer for the first export processing zone enclave in Tema, that is Business Focus Group of Malaysia which have decided to acquire over 600 acres of land within the enclave area to develop and then sub lease for potential operators. This Group is coming from Malaysia with anchor tenants in various industrial activities. We also have another major company which has asked to be leased part of the service land to develop a major cocoa processing factory for the Asian Market.
For the single factory free zones we have 50 single factory free zones that we have approved. About 37 of them are operational and they are variously in the Agri-industrial sector, food processing, textiles. So far we seem to be achieving our objectives for this Free Zones Program, judging from the responses we are receiving.
What is the main role of the Board; is it promoting or monitoring?
The Board has multiple responsibilities. It is promoting the free zone concept, it is also monitoring and regulating the activities of zone enterprises and developers to ensure that the program is in keeping with the national objective.
How are you funded as a Board?
The Board is eventually supposed to be self-sufficient but as a start-up support it was getting below-the-budget-support from the national budget for purposes of setting up the secretariat and related matters. As the board registers new companies various start up fees are charged and these are the incomes that the Board derives from its operations. The Board also leases lands, for example the Tema Enclave land was acquired by the Board and in turn leased to the developer. Also since the board acts as a one-stop point for getting work permits and necessary documents for investors in the zone, a small margin is put on fees payable and this goes into helping the board’s finances.
The program is private sector driven so to what extent do you work hand-in-hand with organizations like the GIPC, the DIC, the PEF which are working within the divestiture program?
The FZ program is encapsulated into a bigger project that we are running; the Gateway Project. The FZ program, the GIPC, the Export Promotion Council, the Ghana Customs Excise and Preventive Service, Ghana Immigration Service, Civil Aviation and GPHA are all part of the bigger Gateway Project. This project affords us a vehicle to ensure co-ordination among these various statutory bodies. The Chief Executive of the GIPC and the CEO of the EPC are non-voting members of the GFZB. This has been done to ensure a more efficient promotional package.
| We have a once-a -month meeting at the board level of the FZB and at the level of the Gateway Project we have a secretariat meeting that I chair, which brings all these groups together to monitor each ones activities so far. Beyond that we have the Gateway Oversight Committee Meeting which is chaired by His Excellency the Vice President of Ghana .
Apart from those you mentioned, which other investors have shown interest and which do you think are coming to Ghana in the future?
The over 50 single companies are from all over the globe. We have about 12 companies from the US, 10 from the UK, some from Germany, the Netherlands and 1 or 2 from the Nordic countries. There is a spread in terms of the interest that is being shown.
Apart from the incentives that have been set up to attract investors, what would you say are other advantages for investors to come into Ghana?
We see the incentives as just the icing on the cake. Our commitment to sustain macro-economic reform, at which we have kept till now, is a strong demonstration of our governments commitments to ensure that we create the right environment for investment attraction and investor confidence in this economy. Besides that we have as a nation pursued very vigorously a market oriented economy. Long before the countries of Eastern Europe and long before WTO got finally initialed in Marrakech we had committed ourselves to that our faith in a free market has in no way been shaken despite some of the difficulties. The competitive spirit is here. We also have a very well educated and trainable labor force which should be an asset to any investment. Ghana happens to be the second leading Information Technology country in sub-Saharan Africa, after South Africa. We have the largest Internet access on the continent and this is further being developed. Eventually we are hoping that we should be able to move into full-fledged IT Application. Recently, under the Gateway Project we have initiated works towards the introduction of trade nets to regulate and harmonize our entire trading arrangements. With this some of the physical involvement in the processing of documentation is going to be eliminated and we are going to have a trade electronic platform which will be accessed by all the participants in the trading arrangements; by customs, banks, exporters and importers, the ports authorities. Once an exporter puts through his documentation all the other players instantaneously know what is happening as a way of speeding up the whole transaction process in Ghana and remove some of the problems that we currently see associated with the bureaucratic hassles.
In conformation with the WTO we have decided to implement next year the WTO Declared Value by abolishing the practice where goods imported into Ghana in commercial quantities are pre-inspected in the country of the export before they come here. This is to avoid over and under invoicing. However our major issue is the quality and price for customs purposes. From next year we will introduce destination inspection practices here and to do that we are building a capacity under the Gateway Project for Customs to have a price data base that links up all the major trading regions of the world.
Then we will adopt a selectivity mechanism by which cargo coming into Ghana need to be inspected on destination. to prevent Ghana from becoming a drug transit we are introducing X-ray container facilities that will be used in inspecting in matter of minutes. By all this we hope to reduce custom examination from multiple-examinations to one by the end of the year 2000.
There are a lot of projects in the pipeline and you are very involved as a member of the Free Zones Board, Deputy Minister of Trade, and Chairman of the Export of Promotion Center. Which of these visions take most of the time?
In both the FZB and the EPC we have Executive Secretaries who see to the day to day activities. My role as the Chairman is to facilitate and coordinate. Since all these activities relate to our objective of achieving an export led growth strategy, it does not give me any headache at all in harmonizing and coordinating.
As you know our Magazine reaches more than 4 million readers, mainly businessmen. What is your final message to them?
The days when our part was perceived as not being ideal for investments can now be seen to be over. Ghana especially has demonstrated in practical terms a commitment to move in partnership with the rest of the global community in ensuring an equity based trade development. Our regulations and procedures are all geared towards a win-win arrangement for the investor and for the country. When the investor makes money the government also makes money so it is in our interest to facilitate the investment process for the investor so that we can gain mutually from the investment activities of the international investor. This is what is guiding the various policy options that we are pursuing to ensure that we develop a smart partnership relationship with would-be investors, both local and foreign. Take a good look at Ghana more seriously because we believe that the coming century will be Africa’s. Those who position themselves strategically in this market will be the ones making the right investment decisions.
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
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GHANA
