 A. INTRODUCTION
The Ghana Free Zone Programme which was initiated by an act of Parliament - Free Zone Act 504 (1995), is designed to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and, encourage the development of commercial and service activities at sea- and air-port areas. In essence therefore, the whole of Ghana is accessible to potential investors who have the opportunity to use the free zones as focal points to produce goods and services for foreign markets.
The Ghana Programme is inextricably linked to the “Gateway” objective of developing private sector sustainable growth through major economic and social improvements to physical infrastructure and a shift in attitude and institutional arrangements in favour of the private sector. It also seeks to promote Ghana as the trade and investment gateway to Africa for exports, imports, storage, transshipment, assembling, distribution, processing, manufacturing of goods and services to the neighboring countries and beyond.
The Ghana Programme is completely private sector driven. Government’s role is limited to facilitate, regulate and monitor activities of zone developers/operators and enterprises.
B. MISSION
The Ghana Free Zones Board has set itself a mission to help transform Ghana into the Gateway to Africa by creating an attractive and conducive environment through the provision of competitive free zone incentives and operation of an efficient “one-stop-shop” for the promotion and enhancement of domestic and foreign investment.
C. INCENTIVES
The extensive and generous incentives packaged in the Free Zone Act (1995) for investors interested in developing and operating free zone enclaves and single-factory free zones in Ghana include:
- 100% exemption from payment of direct and indirect duties and levies on all imports for production and exports from free zones;
- 100% exemption from payment of income tax on profits for 10 years and shall not exceed 8 per cent thereafter;
- Total exemption from payment of withholding taxes from dividends arising out of free zone investments;
- Relief from double taxation for foreign investors and employees;
- No import licensing requirements;
- Minimal customs formalities;
- 100% ownership of shares by any investor - foreign or national - in a free zone enterprise is allowed;
- There are no conditions or restrictions on: repatriation of dividends or net profit; payments for foreign loan servicing; payments of fees and charges for technology transfer agreements; and remittance of precedes from sale of any interest in a free zone investment;
- Free zone investors are permitted to operate foreign currency accounts with banks in Ghana;
- Up to 30% of annual production of goods and services of a free zone enterprise are authorized for sale in the local market; and,
- Free zone investments are guaranteed against nationalization and expropriation.
D. ADVANTAGES
Apart from these generous incentives, Ghana has the following unique advantages for free zone investors:
* A stable political environment within the West
Africa Sub-region, with established democratic institutions
and systems to ensure good governance of the country
* Abundant, adaptable and easily trainable labour
force
* Competitive wage rates
* Duty free access of manufactured exports to USA
* Excellent sea and air connections with Europe
and United States of America as well as other parts
of the world |
* Strategic and central location within
West Africa sub-region providing access to a total
of about 250 million people
* Availability of factory buildings from divested
state enterprises
* Availability of stock exchange and other bank
and non-banking financial institutions
* A dynamic private sector willing to collaborate
with foreign partners
* A high degree of personal safety
The Free Zone Act and its implementing regulations moreover provide relief from various bureaucratic restrictions and other statutory requirements such as, expedited investment approval not exceeding 28 working days; unimpeded issuance of expatriate work and residence permits; and, accelerated on-site customs inspection. Other workers’ rights and conditions of service have been aligned to the relevant ILO conventions which have been rectified in the various Industrial Relations legislation of Ghana.
The implementing regulations of the Act make it possible for free zone developers and operators to lease land on long-term basis from the Free Zones Board, or propose properties they already own for the creation, development and operation of free zones.
Government has also set up the Ghana Trade and Investment Gateway Programme to supervise and co-ordinate the planning, management and implementation of projects with the main objective of developing private sector sustainable growth through major economic social improvements to physical infrastructure and a shift in attitude and institutional arrangements in favour of the private sector.
E. DEVELOPMENT ACTIVITIES
At the moment, the government of Ghana is making most of its roads accessible. The supply of utilities is also being improved. As a first step, the Ghana Free Zones Board with the assistance of the World Bank/IDA Ghana Gateway project shall provide the necessary off-site infrastructure to the designated Export Processing Zone enclave at Tema. Also, processes of related agencies/institutions e.g. Customs, Immigration, Ghana Ports and Harbours Authority, GCAA and Ghana Free Zones Board Secretariat would be computerized in order to provide fast and efficient service to investors.
Further plans are underway for the on-site development of the Tema Export Processing Zone Enclave which would provide the much needed factory shells, warehouses and other necessary infrastructure for immediate use by investors.
Also, the GFZB is taking necessary steps to ensure that the environment is protected. The GFZB is working in close collaboration with the Environmental Protection Agency to ensure that all free zone enterprises comply with environmental protection laws and regulations.
F. ACHIEVEMENTS/PROSPECTS
Within four years of the implementation of the Free Zones Programme, seventy-eight (78) projects have been registered, with sub-sector distribution in Furniture/wood products; Metal Fabrication; Garment and Protective Clothing; Petroleum Products; Food Processing; Rubber/plastic Products; Beauty Products; Coconut Fibre Extraction; Pharmaceutical; Commercial; Warehousing; Packaging; Telecommunication; and, Fibre Glass Manufacturing. Out of the seventy-eight (78) licensed projects, fifty-two (52) are operating whilst the rest are in a start-up or build-up stage.
The interesting aspect of projects attracted into the Free Zones Programme is the diverse nature of nationalities and origins of the investments. The background of promoters of projects registered as free zone operations include countries such as USA, Lebanon, South Africa, China, United Arab Emirates, Britain, Austria, Malaysia, France, Italy, Ireland and Germany.
Although investments generally are most welcome in Ghana, the Ghana Free Zones Board invites and gives preference to manufacturing projects that are mainly export oriented. The Ghana Free Zones Board means business and looks forward to discussing your investment plans with you at your request. |
