New Act attracts more manufacturing companies — GIPC
More individuals and companies have been buoyed up to set up manufacturing companies as a result of the new Investment Act, Mr Augustine A. Otoo, the Director, Research and Business Development, Ghana Investment Promotion Centre (GIPC), has said.
According to him, the Ghana Investment Promotion Centre Act 2013, Act 865, which was passed by Parliament in 2013, provided the needed flexibility to attract more companies to the manufacturing sector.
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He said this when he presented the GIPC’s perspective of regime reforms that were geared at attracting and sustaining investments at the launch of the 2015 World Investment Report in Accra last Wednesday.
The launch was on the theme, “Reforming International Investment Governance” and was jointly performed by Mr Otoo and Mr Philip Cobbina, a lecturer at the GIMPA Business School in Accra.
Reason for new GIPC law
Mr Otoo said the new law was passed to make the facilitation and promotion of investment in Ghana very attractive.
“We realised that there was a need to make the facilitation and promotion aspect of investment quite attractive, bearing in mind the competitiveness of FDI attraction worldwide and within the African context,” he stated.
He added that flexibility had been promoted under the new law in terms of attracting more companies into the manufacturing sector, as the law exempted companies in the manufacturing sector from import duties “so that more productive activities will be done than just merely importing and making sales”.
The Ghana Investment Promotion Centre Act 2013, Act 865, was passed by Parliament after the GIPC had relied on Act 478 for almost two decades.
Section 26 (2) of Act 2013, Act 865, states, “An enterprise whose plant, machinery equipment or parts of the plant, machinery or equipment are not zero-rated under the Customs Harmonised Commodity and Tariff Code Schedule to the Customs, Excise and Preventive Service Management Act 1993 (PNDCL 330) may submit an application for exemption from import duties and related charges on the plant, machinery or equipment, or the parts of the plant, machinery or equipment to the centre for onward submission to the minister responsible for Finance.”
World Investment Report
Commenting on the main theme of the 2015 World Investment Report , Mr Otoo confirmed that Ghana was not exempted from the global trend.
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He noted that the dollar was increasing in strength against the cedi, “because most of the time we are importing just anything instead of us being productive enough to export as a country,” adding, “We need to re-look at our policies to do a lot of things.
“Locally in Ghana there was a decline in FDI. In 2013 in Ghana, we attracted US$3.61 billion and in 2014 there was a slight decline. We recorded US$3.57 billion in 2014.”
Giving an overview of the World Investment Report, Mr Cobbina said although there were increased measures to promote Foreign Direct Investments (FDIs) in 2014, FDI fell globally last year.
According to the report which was produced by the United Nations Conference on Trade and Development (UNCTAD), global FDI fell by 16 per cent to $1.23 trillion in 2014, as a result of the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks, while new investments were also offset by some large investments.
Nonetheless, the report affirms that an increase in measures taken by governments to liberalise foreign direct investment, combined with a fall in restrictions, led to enhanced conditions for foreign direct investment promotion in 2014.
It says 37 countries and economies adopted at least 63 policy measures, out of which 47 were related to liberalisation, promotion and facilitation of investment. Nine of the countries introduced new restrictions or regulations on investment which were mostly related to national security concerns and strategic industries.
Writer’s email: edmund.asante@graphic.com.gh