Though the Ghanaian government has come under severe criticism for insisting that foreign businesses in the country must invest a minimum of $300,000, Layi Adeloye reports that the authorities are unperturbed and may not be willing to reverse the policy.
Beyond the emotional and political responses that have trailed the Ghanaian authorities' decision to impose a mandatory pre-operational business requirement fee of $300,000 on foreigners, two major factors, identified as the underlying reasons for the new policy, appear to have foreclosed any chance of reversal of the policy.
According to investigations by our correspondent in Accra and Tema, the Ghanaian authorities had documentary evidences of business and economic infractions by some foreign nationals, including Nigerians, before evolving the policy on would-be foreign business operators in the country.
Besides, the fake drug conundrum of the past few years, which originated from Nigeria to other countries in the West African sub-region, might have toughened Ghana's stance against Nigerian small business operators, a situation that may make reversing the policy against Nigeria a hard nut, even if it is relaxed against other nationals.
However, investigations further revealed that the policy was not targeted at big business operations and major investments, as they would have provided enough guarantee against infractions as a major condition for registration.
Sources at the Ghanaian Investment Promotion Centre and the Association of Ghana Industries (equivalent of the Manufacturers Association of Nigeria), said the new policy had the blessing of the citizenry, and could not be reversed by the Ghanaian government, no matter the political pressure from the outside world.
According to the sources, if such a reversal would be effected, the government has to get the mandate of the stakeholders, who will only give such after being convinced that the initial grounds no longer exist.
An official of GIPC, who identified himself as Mr. Matthew Gyamfi, expatiated further, "The policy was not designed as witch-hunt against the nationals of any country, whether Nigeria or others. To us, it is an investment promotion strategy. What we are saying is that whoever wants to do business in this country must have enough confidence in the economy.
"Naturally, we expect such a person to bring money into the economy. The $300,000 is not a levy or a registration fee. It is the value of the start up capital expected to be brought into the country if someone genuinely wants to do business in Ghana."
According to him, "With an investment of, at least, $300,000 in the economy, any foreigner would be wary of what he does and how he conducts his business in the country."
Incidentally, a Nigerian, who is the Public Relations Officer, ZPower Gold Limited, a leading Ghanaian mining firm based in Tema, Mr. Frank Igilenyah, also supported the Ghanaian government on the policy. He said the policy was a product of necessity that was targeted at driving investment inflow into the Ghanaian economy.
According to him, "Those who may likely be affected are the 'yahoo boys' and the so called cross-border traders, who have no interest in generating developments in any economy."
He added, "For serious businesses with multiplier effects on the economy, there is nothing to fear. Nobody has been asking existing businesses to pay any amount. Instead, the government has been generous with tax holidays, for instance, of five years after initial take off. The fact that the infrastructural facilities are on ground and functioning, in addition to the various incentives, make doing business here for genuine businessmen an encouraging thing."
The Executive Secretary, AGI, Mr. Cletus Kosiba, was not available for comments. Besides, subsequent enquiries through e-mail on Friday remained unanswered as at Sunday. However, an official, who spoke under anonymity, said the future of Ghanaian economy was the major reason behind the policy.
Wondering why there should be any uproar on the policy, he said it was expected that any intending businessman would go into his target economy with investment funds.
"This is what the policy is saying. If you are coming into Ghana to do business, especially trading, you must have certain minimum entry investment funds. It is certain that no manufacturing business would do with such an amount as low as $300,000," he said.
According to the GIPC manual on "Setting up a business in Ghana," minimum capital requirement is just one, and the fourth, of the four major conditions. The manual says, "An entrepreneur, irrespective of nationality, can set up a business enterprise in Ghana in accordance with the provisions of any of the following legal instruments: The Companies Code, 1963 (Act 179); the Partnership Act, 1962 (Act 152); the Business Name Act, 1962 (Act 151); and the Minimum Foreign Capital Requirement.
"A foreign investor may team up with a Ghanaian entrepreneur or company for a joint venture, usually in the form of a partnership or a limited company. However, under the Ghana Investment Promotion Centre Act, 1994 (Act 478), a minimum equity capital of $10,000 is required from any foreign investor who intends to enter into a joint venture partnership with a Ghanaian in any area of economic activity, except trading. In trading, the minimum equity capital requirement is $300,000.
It adds, "The foreign shareholder is required to satisfy this minimum equity capital either in cash transferred through Ghana's banking system or its equivalent in the form of goods, plant and machinery, vehicles or other tangible assets imported specially and exclusively to establish the enterprise. The imported items must be covered by a Destination Inspection Report issued by an accredited inspection company, stating the value and condition of the goods. Consideration for goodwill of a business or services rendered by partners cannot be used to satisfy the minimum foreign equity capital.
Source: Layi Adeloye of The Punch
