|
| 
Interview with
Mr. Kwesi Ahwoi,
Chief Executive.
October 13th 1999
Contact :
PSC Building – Ministries Area
P.O.Box M193, Accra - GHANA
Tel: (233 21) 665 125 - 9
Fax: (233 21) 663 801
E-mail: gipc@ghana.com
Web-site: www.gipc.org.gh
|
Could you give us a brief historical background of Ghana Investment Promotion Center?
The Ghana Investment Promotion Center, abbreviated to GIPC, has been in existence since 1960’s. in 1964 it was called the Capital Investment Board with the same function as today. In 1985 it changed its name to the Ghana Investment Center, again with the same mandate as today. And in 1994 it became Ghana Investment Promotion Center. The difference over the years is that we have moved from a regulated investment regime to a liberalized investment regime. Regulated in the sense that every single project coming into the country had to pass through this office, it had to be appraised and approved by us and then assigned specific concessions and incentives before the project could take off here. Now we are not doing that kind of appraisal, vetting of projects. We are accepting every project that the investor brings, we have put every sector on priority and what we are doing now is holding the hand of the investor and facilitating the establishment of their business after we have done the promotion side of it. Therefore our mandate has changed from regulating to promoting and facilitating business. The main thrust of attracting direct foreign investment and local capital into the economy remains unchanged.
What would you say are your main responsibilities today?
The first is to promote Ghana; Ghanaian projects and companies in terms of linkages with the rest of the world’s business community. Then we are to facilitate the establishment of businesses in this country by helping to speed up processes, removing bottle necks in securing permits and authorities that the businessman needs to establish his business. We have what we call the hands holding approach. When you enter this place to register your company, because the law requires that you register here, we hold your hand, we assign an officer to your business, and for the rest of the life of the business that officer is your contact person in Ghana. He is the one who carries along any problems or issues that you have. We pay him though he works technically for you. Then we also play a serious advocacy role for the business community, for the private sector by way of feeding back to government private sector response to government policies and issues as they affect business and also feeding back to the business community, the government’s policy and all. We marry businesses. We find credit worthy partners for foreign investors.
The law that operates the investment regime requires every foreign investor to bring a certain minimum into the country from outside. If it is a joint venture, $10,000 is the minimum equity capital that the law expects the foreigner to bring. If it is 100% ownership by the foreign person we expect $50,000. This office registers the fact that that equity has been transferred from a bank abroad into Ghana and that is what the certificate authenticates. This money brought in has to be converted into cedis, it cannot stay in the currency in which it came, for the operation of the company.
How is GIPC funded?
We survive on the central budget. We are a subvented organization, that is to say we are on the regular budget of the government but we are below the line. We have an 8 man board, 5 of them are private sector representatives and the Chairperson is in the private sector. The whole idea is to give some private sector dynamism to this establishment. The staff is employed by government but the board is private. Occasionally we charge very minimal fees, to cover administrative cost
What are the main incentives that have been put in place to attract foreign investment?
We have broken the investment front in this country to about 4. There is the Minerals Commission responsible for all the mining activity, then there is Ghana National Petroleum Corporation (GNPC) which regulates the petroleum and gas industry, we also have the Free Zone Board which regulates operations within the free zone. We are left with the rest of the economy outside these 3 areas, which is the biggestand covered by the GIPC Act.
Thus incentives in the main are the same though there are some slight differences. In the non-free zone area we have some tax holidays ranging from about 0 tax for life to about 10 years tax holiday, which is for long gestation projects like cattle farming, agriculture, tree crop farming. In cocoa farming there is an indefinite tax holiday. Then we have accelerated depreciation for manufacturers, which is about 50% per annum total depreciation. We have location incentives. If you are located outside Greater Accra and the regional capitals you could get 25% or 50% tax rebate. In the tax area, if an investor is in the export business he pays 8% company tax on the export earnings as against 35% company tax that every company pays. The hotels pay 25%. In the free zone area you start with a 10 year tax holiday and after 10 years you pay 8% tax holiday. They are all entitled to zero duty on equipment, machinery and spares and also to expatriate employment. We have been working with this new incentive regime since September, 1994. We are looking to see if we cannot improve it to match what others are doing.
What has been the response to all this?
We have received impressive responses from both local and foreign business community. There is never a month that we do not receive business visitors; in groups and individuals. Since the new law, as at June this year we had done 890 projects and the total investment cost of that is about 1.3 billion dollars. It works on average to about $400 million foreign direct investment a year and this, for a non-oil producing country, is quite substantial. In terms of foreign investment ranking it is UK first, followed by US, then China and Germany. The Far East is catching on very quickly but for the crunch they suffered recently, they were making very aggressive entry into the African Investment Front. Ghana started recording substantial in-flow from the Far East, specifically Malaysia, Korea and Taiwan but this has stalled because of their own crisis that they are coming out of. We seem to be attracting quite a lot from the US now. Between May and now we have received about 10 missions from the US. We are also getting some interest from South Africa and Nigeria.
| Are there any measures you want to take in the future to attract even more investors?
I think our message will be that as a developing country the opportunities are very great considering the fact that we are developing a lot of undiscovered areas. Real businessmen who go for calculated risk profit will do well to look at a country like Ghana which is dubbed as one of the top emerging markets. We are looking at physical infrastructural development where private sector can come in and play roles; road development, air and sea port improvement and privatization, infrastructure in tertiary education, health area. Ghanaians abroad are one of our biggest target groups and in July of next year we are planning to hold a summit that will bring all Ghanaians from all over the world home to discuss how to apply their new high status to the development of their motherland.
We also have private projects that have been given to us to look for partners for them. We have a document called "Partner Search" on the web, where we have listed all kinds of projects in various sectors, and what they are looking for.
Could you give us some successful stories of Ghana-America partnerships?
Darko Farms is one of such. Darko got us involved, so we talked to Tyson and we have been virtually a partner in convincing Tyson to look at Darko. There is also Carson, which is into hair products, who we met recently. Coca Cola has had to come and buy back the government share, Phyto-Riker is an American Pharmaceutical company which has come to buy GIHOC Pharmaceuticals, a government owned pharmaceutical company. Star-Kist, an American firm that does tuna canning is in Ghana and Ghana’s factory is the leading factory in their arsenal all over the world. Their highest profit comes from their Ghana factory. There are almost 80 American companies.
What would you identify as the gray areas where Ghana needs to improve to acquire the status of an export-led economy and attract more investors?
We need to lay emphasis on the non-traditional exports without killing the traditional exports. We need to add value to the traditional exports; gold. We need to produce the jewelry, those parts that go into servicing the planes and all those that go to the moon. For dental purposes gold comes in very useful. We need to move timber to downstream processing. We are still processing less than 40% of our cocoa capacity. Then we need to look at new areas in the non-traditional sector that have world markets. We have the competitive advantage looking at areas like agro-processing, labor intensive activities. Ghana can be used as the hub to produce for the sub-region since the structures are right. We need every country in the sub-region to come to par so that we can market the whole sub-region as a block. But in the interim we need to have leaders and I would talk about Ghana and Cote d’Ivoire being leaders in that sense. The government has proven that it is a very pro- business government.
What would you say has been your greatest personal achievement since you have been the Chief Executive of GIPC?
I have helped move this country from where it used to be and positioned it among the top rank of the emerging economies in the developing countries. I think I have played a very strong role in that as head of the various agencies that I have headed, there has been a drive, a vision, that changes not only the establishment but all operatives which have something to do with the establishment. I used to be the Head of the Export Promotion Council, and also of the Trade Fair Center and now I am here. Private sector in this country has seen this office as a very pro-business one, a problem solving one and a driving force behind their success and we are getting so much collaboration from the private sector in this country that it is overwhelming. For the African African-American Summit, the fact that GIPC was driving the program enabled us to raise almost about 35% of the total budget for hosting that workshop from the private sector. What is left to be done is to reduce bureaucracy, to minimize red tapeizm and to minimize the cost of doing business. When we are able to bring it to the real competitive levels then I would have finished my job.
0 As you know Forbes targets more than 4 million readers, mostly businessmen. Ghana, the Gateway to Africa, is looking for strategic investors, so what is your final message to them?
0 We are pushing corporate Ghana into the global business world. Therefore we are sponsoring a Club called "Ghana Club 100". This club is listing of the top 100 companies in Ghana and we want your readership to look out for these companies because these are the real leaders of Ghana, and as leaders in an emerging economy they offer a lot of opportunities. Come the Millennium and the competition is going to be mergers and acquisitions.
|
© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
Developed by AgenciaE.Tv |
|
|
|
| | | | | |
|
GHANA
