Parliament on Thursday passed the amended Ghana Investment Promotion Centre (GIPC) Bill 2013, revising the country's investment laws to reflect changing economic dynamics to guarantee optimum business opportunities and incentives for Ghanaian enterprises.
The Bill, that seeks to repeal the GIPC Act 1994 (Act 478), generated angst among foreign investors when it was placed before Parliament in March this year, with the investors arguing that certain interventions in the modified legislation held serious implications for foreign direct investment into the Ghanaian economy.
But Government, through the bill, is keen to regulate investment policies to foster efficiency in attracting strategic foreign direct investments that would inure to the benefit of Ghana's development drive, and provide Ghanaians with opportunities to take advantage of the improved economic situation prevailing in the country to business.
The Bill seeks to position Ghana as the hub for business in West Africa.
The current GIPC Act, 1994 (Act 478) has become obsolete after almost 15 years after promulgation, necessitating a review to reflect recent developments to provide a new policy direction for the country.
It also seeks to establish the Ghana Investment Promotion Centre as government agency responsible for the encouragement and promotion of investments.
The Bill rectifies the abuse of sectors reserved for Ghanaians by foreign investors, particularly the retail and trading sectors, increasing the minimum capital required of foreigners to engage in retail trade from 300,000 dollars to one million dollars in cash or goods.
The review ensures that Ghanaian entrepreneurs are not subjected to competition from unscrupulous foreign businesses that would make it unprofitable for them to operate.
The bill, however, encourages foreign investors to engage in large scale value added trading activities that would not interfere with activities of Ghanaian petty traders, but create employment for greater number of local people.
The amended legislation extensively ropes in all enterprises, including mining and petroleum concerns that were not previously covered by the GIPC Act 478, to ensure increased efficiency in the coordination of investments, improved investment promotion strategies and a comprehensive dissemination of information on investment in Ghana.
The Bill makes it mandatory for all enterprises, including Ghanaian businesses to register with the GIPC to enable the Centre coordinate all activities of investors in the country.
It addresses the gross abuse of huge foreign exchange resources being repatriated without tangible transfer of technology.
The Bill also introduces a provision that requires Ghanaian partners in joint ventures to have not less than 30 per cent equity participation, and prohibits the transfer of that equity to a non-Ghanaian in order to avoid the circumvention of the higher foreign capital requirements.
By this provision foreign companies are prohibited from venturing into the production of packaging materials, manufacture of furniture and wood products, and manufacture of sanitary products.
The foreigners would not engage in services connected to oil and gas, and mining industries, as well as the manufacture of generic pharmaceutical products.
The Bill reserves the sale of goods or provision of services in markets, petty trading, hawking or selling of goods in stalls to Ghanaians.
Foreigners cannot operate taxi or car hire services in an enterprise that has a fleet of not more that 25 vehicles.
They cannot operate beauty salons or barbers shops, are prohibited from printing recharge scratch cards for the use of subscribers of mobile telecommunications services.