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 GHANA TRADE & INVESTMENT GATEWAY PROJECT (GHATIG)
Interview with
Dr. G. Sipa-Adjah Yankey ,
Chief Executive Officer
August 25th 1999
Contact :
THE GATEWAY SECRETARIAT
C/O Ministry of Trade & Industry
P.O.Box M47, Accra - GHANA
Tel: (233 21) 663 439 – 664 074
Fax: (233 21) 665 423
E-mail: gateway1@ghana.com
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The Gateway Project seeks to attract export-orientated investment, to kick start export led growth as well as facilitate trade. How are you going about doing this?
There are a number of measures which are being pursued to achieve this particular goal. What we have done in the first instance is to select a number of, what we call, front line agencies which investors do get into first contact with. These are the Ghana Civil Aviation Authority, the Ghana Free Zones Board, the Ghana Investment Promotion Center, the Ghana Ports and Harbours Authority, the Customs Excise and Preventive Service, the Ghana Immigration Service. There is one other agency, the Environmental Protection Agency which is not directly involved in the Project but whose involvement has become necessary to ensure that the environment is not degraded with the upsurge of industrial establishments that will be created by the project. Now, we intend to attract a number of export orientated companies by creating Export Processing Zones. A Free Zones Board has also already been set up which will manage the zones that are being developed. What we have succeeded in doing is to contract a credit facility of US$50.5 million from the World Bank with Government providing US$5.5 million for the project. About US$33.4 million will be provided for basic infrastructure facilities like expansion of the road network from the motorway to the border of the enclave, extend water and power to the border of the enclave. This is to ensure that we do not impose these investment expenditure on the private sector developer of the enclave. The difference between the approach that we adopted and what has taken place elsewhere in Africa is that the free zone developer is a private sector developer not government. We are facilitating this private sector developer by bringing all these facilities to the border of the enclave and by so doing bearing the cost and lessening the burden on him. He will then do the investment, infrastructural development investment on the site, put up the shelves, prepare the land and so on. And then together with this developer the Ghana Free Zones Board and the GIPC will market that investment potential to companies which will wish to establish in the free zone area. We are looking for companies with the edge to compete on the international market, and to contribute to that we are giving a range of incentives which will make their products competitive on the international market. The second measure or strategy being adopted under the Project is to re-engineer the above-mentioned institutions to make them more efficient in the delivery of their service so that these enterprises located in the Zones can impact on cost and the speed with which they are able to deliver to their customers abroad. Consequently, all this is to support the attraction of a critical mass of export oriented industries.
You said you are receiving $56 million from the World Bank. What type of a loan is it? Is it a bulk sum, a year loan or a total loan?
The loan is made up of US$50.5 million from the World Bank and US$5.5 million from the Government of Ghana. It is a one-time loan payable over 40 years with 10 years grace period. This money has been committed and will be disbursed as and where needed. That loan has been negotiated in bulk and has been earmarked for the project and we will only access it as and when required.
You were also saying that the GIPC and the GFZB are the ones implementing and marketing the whole idea abroad. How are you going about doing that?
First of all potential industrialists or companies which want to locate at the enclave must know about the facilities that exist there. The GFZB and the Business Focus, which is the private sector developer is developing the first phase of the enclave, will jointly market the facilities that exist there to potential businesses. In addition, GIPC will also continue to market the investment environment in Ghana in order to attract investors who may wish to locate in Africa while the Ghana Free Zones Board will concentrate on the facilities that exist in the enclaves. The one in Tema is the first, and a second one will be developed in Takoradi. At the same time we will market the range of incentives that are already available. The Marketing Plans and strategy are being discussed now with the Business Focus Group and hopefully before the end of the year we shall start with the marketing programme.
In which countries abroad are you marketing and also which companies have already shown interest?
Already Business Focus is coming along with 20 companies, and in all about 70 companies have been approved for Free Zone status by the GFZB. About 20 are waiting to locate in the Export Processing area in Tema and we know that others are planning to develop their own structures to start processing cocoa and other products so we have quite a few number of companies which are ready to locate and all that they are waiting for is the completion of phase 1 of the project. The type of industries that we expect in the export processing zone include agro and food processing, wood, computer assembling, jewelry, textile and others. Provision is also being made for other types of products whose production could take place in the enclave.
What exactly are you doing to re-engineer the institutions which are marketing the idea and what is needed to be done and what are your goals?
Now anybody coming to invest in this country, bringing in machinery, plant and equipment to install to produce must certainly come through the Port of Tema or the Airport. Now what we are doing with the Ghana Ports and Harbors Authority is to transform the GPHA with the view to making it more efficient, and transform them from being a service port, which they are now to a landlord port where they would become the owners of the facilities of the port. We would then out-source most of the port activities such as cargo handling, stevedoring and container terminal operations, to the private sector who will have the money to invest in them. It does not stop the Ports and Harbours Authority from going into joint ownership in these activities, but we expect most of these activities to be out-sourced to the private sector hoping that services to the users of the port will become more efficient. The Ghana Ports and Harbors Authority would then continue to concentrate on the development of the infrastructure facilities at the Port. Now we are working on the dredging of quay 2 so that we can deepen the draft from about 9 to 14 metres to enable it to take a new generation of vessels. We are also working on the construction of another port on the east side of the Harbour and we expect that the port authorities will concentrate on these and leave the other port activities to the private sector.
We expect the Ghana Customs whose traditional role has been the collection of revenue to become trade facilitators so that while they collect revenue they can at the same time facilitate trade. This could be achieved through measures such as single instead of multiple examination and selective but not 100% examination. Before the end of the period we should be doing 10% examination for statutory free goods and 20% for dutiable goods in order to reduce the time spent on examination so that importers and companies will not have to spend too much time and money clearing their goods. The reengineering of the Civil Aviation will seek to restructure the Civil Aviation Authorities, break it into 2 organizations; the Civil Aviation Authority which will be solely responsible for safety regulations and security, and an Airport Authority which will be responsible for the development of the airport. With this and the division of the major functions of the port we expect that agencies will be better focused to concentrate on their particular areas of operation so that there will be more efficiency.
Obviously most of the products going in and out of the country will be going through the ports. By how many times would you like the air freighting to grow in the future?
There are a number of goods that go through the ports, and some of these are perishables. In addition, there are some orders which need to be met timeously. Consequently, we expect that air freighting will grow very considerably in the years to come. | Is all this within the Vision 2020 program or has this got a time scale of its own?
All these are part of the Vision 2020 but what we are doing is that there are a number of projects which are being used as vehicles to realizing the goals of Vision 2020, and the Gateway is one of them. At the end of the day when all these vehicles have been used and have accomplished their goals we should then be reaching the goals of Vision 2020.
Could you just sum up in a few words exactly what the mission of the Gateway Project is?
The Gateway Project seeks to make Ghana the most preferred and most efficient investment and trade destination in West Africa with a view to contributing to the acceleration of the growth of the national economy.
With reference to what you are saying, how are you going about competing with other West African countries. For example, Nigeria has got its own gateway program and it has a very big market. In other words how are you going to ensure that Ghana is a preferred destination for everyone who comes to West Africa?
With the continued adjustment program that we have been pursuing since 1983 we intend to sustain the stability of the economy, pursue prudent macro-economic policies, provide security for goods and for people working in the country and generate more efficiency in the agencies whose work impact on trade and investment. In addition to that, the more the agencies, we are working, become efficient, the more it would lead to reduction in costs of their services. Certainly, investors will look to where it makes sense to do business. Despite the size of Nigeria, if it costs more money to clear goods in Lagos people might decide to come here. That is why we want to make the Port of Tema very efficient and eventually the hub in West Africa. When we have made our environment more efficient, stable and secure for both investors and their investments certainly we can become the preferred destination despite the size of Nigeria. I am hoping that all the countries in the Sub-region will become stable because any investor wanting to invest in Ghana will also be interested in the entire market of the sub-region.
We are trying to make our country the platform on which investors are going to launch their activities. Once you invest here you can access any market in West Africa.
0 Since the Gateway project has began, how successful would you say it has been and what are your expectations for the future?
0 The project was formally launched in February 1999 and it is not yet one year old. It therefore makes it difficult to assess the success of a 7 year project in less than 1 year, but I can assure you that if you look at the transshipment that is taking place through our harbours which are now being used to transship goods to Burkina Faso, Mali and Niger and if you look at the volume of cargo you will realize that it has increased quite considerably over the past few months. We hope that before the end of the project all the goods destined for those countries will pass through Ghana. In addition to the improvement in the service delivery by our ports distance also favors us. The distance between the ports in Tema and Ouagadougou is 940km, between Abidjan and Ouagadougou is 1400km, and between Lome and Ouagadougou is 1200km. so with this mileage difference, efficient and less costly port services, it certainly makes business sense to use our ports. There is some glaze on our roads over our few barriers. Under the project we expect to have only 2 barriers between Accra and Paga ( the border between Ghana and Burkina Faso) so that there will be less distraction and harassment on our roads. From Accra to Aflao there would be only 1 checkpoint, from Accra to Elubo 2. This will also facilitate the movement of the trucks which cart goods destined for Togo or Burkina Faso.
1 You are liberalizing the country as well as the whole region.
1 The economy of the country has been liberalized and continues to be liberalized. Under the project, some activities currently performed by some of the implementing agencies will be outsourced to the private sector. We hope the same will happen in the sub-region. The Ghana Civil Aviation is pushing very fast with the components and we can see what we are doing at the airport to facilitate movement of passengers and goods. Work is being done. Now we are in the process of procuring equipment, construction services so much cannot be seen but in the next 6 months things will change. When we have developed our trade network, and the EDI is established we expect Customs, the Port Authority, the Civil Aviation, Ship owners, exporters and importers to get hooked onto the network and we hope that processing of documents will remove a lot of the hurdles in manual processing. We expect to do more transactions and instead of days we will reduce it to minutes and that will also help the quick clearance of goods at the port.
2 What would you say are the greatest challenges that you are facing and if there is anything that you were to need what would it be?
2 Luckily most of the needs of the project have been provided for. One of the greatest challenges to us would be the internal constraints. One major problem is bureaucracy and the mind set of some of our own public officials. We need to re-orient them, get them on our side and move together, because without that it will be difficult to move on. Unlike others I am least worried about Nigeria and La Cote d’Ivoire. I am worried about our own internal difficulties, especially the differences we have when it comes to urgency with which we have to apply ourselves to our responsibilities.
3 The authorities chose a man with a vision to be the CEO of the Gateway Project. Could you tell us a little bit about your background and how you got to be CEO of the Gateway Project?
3 I hold a degree in international finance and investment law. Before I took this position I was a director in charge of the private sector and financial institutions at the Ministry of Finance. I have consulted for the UN, was visiting professor at the International Law Institute of Georgetown University, Instructor at the International Development Institute in Rome. I am a Senior Special Fellow at the UN Institute for Research and I have also done some work for the UNIDO in Uganda and Kenya. I have also served for the UNDP in Tanzania and served on a few boards in Ghana.
4 As you know Forbes Magazine targets more than 4 million readers, mainly businessmen. What is your final message to them?
4 Ghana is the most efficient trade and investment destination in West Africa at the moment, and investors and their investments are safe and protected by law. Ghana provides a highly profitable and rewarding environment for investors, and Government sees itself and acts as a facilitating partner to all investors hoping that investors will share in the resources, wealth, success and prosperity of the country.
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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
