A study conducted by the World Economic Forum has recommended to the government to review the minimum capital requirement to rake in more Foreign Direct Investment (FDI) in the country.
Presenting the findings of the study at validation workshop in Accra, the Lead Consultant for the study Mr. Appiah Kusi Adomako said setting minimum threshold capital requirement across board would deprive investments into sectors which does not require substantial investment. He cited for example a foreign investor coming to invest in information communication technology (ICT) sector does not need to have the same capital requirement with someone coming to invest in the real estate or mining sector.
Mr. Adomako stated that “all enterprises in the country with foreign participation are required to register with the Ghana Investment Promotion Centre (GIPC). Under the new GIPC Act, 2013 (Act 865), the minimum capital required for retail business has also moved from $300,000 to $1 million, while foreign investors who participate in joint venture enterprises have to show a minimum capital of $200,000 with wholly-owned foreign enterprises showing a minimum capital of $500,000”
He said as part of efforts to attract foreign investors, most countries in the West Africa sub-region have removed the minimum capital requirements for foreign investors. With the phase two of the African Continental Free Trade Agreement (AfCFTA) on investment, intellectual property and competition policy to start very soon, Ghana would need to align its investment laws with that of the continent.
Mr Adomako recommended that in order to facilitate the investment and the ease of doing business, government should deploy an online single window for company registration, tax registrations, SSNIT, business operating permits and investment certificate.
In his remarks, Mr Matthew Stephenson, Policy and Community Lead on International Trade and Investment at the World Economic Forum recommended the establishment of investment aftercare services to help facilitate investment.
Mr Stephenson, added that the GIPC Act provides a clear explanation and variation between investment promotion and investment facilitation, hence, presenting Ghana with a strong legal and institutional framework for investment facilitation.
The Director of Investor Service at GIPC, Mr Edward Ashong-Lartey stated that the Centre has started with a multi-stakeholder consultation over the past few years to receive the inputs, suggestion and recommendation on what changes need to be done to modernize the GIPC Act.
“If we are to continue to be the best place to do business in West Africa and Africa at large, then there is the need to review all Investment laws to better position Ghana as the investment hub in Africa,” he added.
The Secretary-General of the International Chamber of Commerce, Mr Emmanuel Doni Kwame lauded the team for putting together the brilliant report. He stressed that the recommendations highlighted should be implemented to improve investment climate.
The research was undertaken by CUTS International on behalf of the World Economic Forum and the Ghana Investment Promotions Centre (GIPC) to understand investment facilitation measures for sustainable development.