GIPC anticipates more investments in 2014
The Ghana Investment Promotion Centre (GIPC) is targeting a 20-per cent rise in investment inflows into the country in 2014, despite a decline in 2013.
Investment inflows into the country, declined by 24 per cent in 2013, as a result of economic challenges including energy crises and the 2012 election petition which left several investors uncertain on the fate of the economy.
The Director of Research and Investment, Mr Kofi Sakyiamah Antiri, told the Graphic Business in an exclusive interview on February 21, that “we are projecting at least 20 per cent more than we got last year but we believe strongly that it could be more although we do not want to raise hopes so high.”
According to him, observations from the last quarter of 2013 sent across strong signals and as a result, the investment climate is expected to be better this year.
“We believe strongly that there will be the normal inflows, as of now, the only thing that shook the system a little was the Bank of Ghana thing and we are very happy that immediately after, they came out with corrective directives and now a few people are at peace,” he said.
Mr Antiri further said, “now we believe that even if there are no new incentives or special conditions created by the government, the way things are now and the impression people have about Ghana, we believe this year will be much better than last year.”
2013 Investments
In 2013, the economy attracted investments worth US$4.2bn against year 2012 where it was able to attract about US$5.6 billion in investments.
“There was a shortfall of about 20 to 24 per cent but looking at the problems we had with energy last year, and the court case, the decline was to be expected. But in fact, if you look at the trend every year after general elections the first six months of the year is not so good,” he said.
Citing, other election years; 2000, 2004, 2008, he said investments usually dip during that period but normally picks up in the third quarter.
“Investments that were attracted in the third quarter of last year were double what was attracted in the first half of the year. That is for the first six months, if we got about US$400 million, the third quarter, we got about US$800. So it is something that is picking up and we know it will continue,” he assured.
In all, 399 new projects were registered, covering all sectors of the economy, but Mr Antiri was quick to add that “we were happy that in spite of the 24 per cent dip, about 89,000 jobs were to be created from these investments and that figure was almost twice that of 2012.”
According to him, it was of much significance because the economy could attract a lot of projects and if it failed to create jobs, then the economy would not be achieving much.
“So from what is happening, we believe if we are able to get such projects that can create more jobs, we will be at advantage,” he said.
The services sector recorded the most investments followed by manufacturing and building and construction with the export trade sector recording the least.
“The export trade attracted least investments. In actual fact, even though export trading will bring in some foreign exchange we still believe that trading per se is not something we should go about promoting,” he explained.
He said if the economy was able to get a lot more people into the services or agriculture sector or manufacturing and they were able to produce to meet the needs of the country, “we will be able to bridge that deficit in trade and once we produce more, export will by all means follow.”
NEW GIPC ACT
The GIPC Act 865 2013 came into effect in November last year, with new highlights to expand the mandate of the centre, increase the number of activities reserved solely for Ghanaians and also to increase the threshold, that is the amount an investor has to show to be able to invest in the country.
The new GIPC Act also makes provision for offences and penalties which were missing in the old GIPC Act 468 enacted in 1994.
Per the new legislation, a foreigner who wants to go into a joint venture with a Ghanaian has to show evidence of US$200,000 and also the Ghanaian should not be given less that 10 per cent shares in the company and for a wholly owned foreign company, evidence of having brought into the country, either cash or equipment amounting to at least US$500,000 should be seen.
Unlike the old act that required foreign investors engaging in trading in the country to bring in goods worth US$300,000 and also employ 10 Ghanaians, in the new Act, they are supposed to have brought in goods worth US$1million and also to employ 20 skilled Ghanaians.
Aside these revised requirements, Mr Antiri said there were instances where investors did not have to show any evidence of having brought in any initial capital such as the marketing and portfolio investments.