Government is looking to aggressively push for more Foreign Direct Investment (FDI) as it seeks, among other initiatives, a significant revision to the Act that established the Ghana Investment Promotion Centre (GIPC), the government’s main marketing agency.
Finance Minister, Ken Ofori-Atta, delivering the 2020 Budget and Economic Policy of the Government of Ghana to lawmakers, noted that as government works to make Ghana a much friendlier place for business, there are plans on an aggressive agenda to attract more FDI to supplement the resources from government and domestic investors.
“Foreign Direct Investment (FDI) has become an important component of economic growth globally. Accordingly, almost all nations compete to attract and retain FDI because of their potential to add value to the local economy,” he said.
Data from the Bank of Ghana and the GIPC points to an average of US$2.9billion annually between 2016 – 2018, which stands at 5percent of Gross Domestic Product (GDP).
Despite these inflows, Mr. Ofori-Atta believes that Ghana is well positioned to become the number one destination for FDI flows in the medium to long term for a host of reasons including its location, literacy rate, English language, rule of law, strong macro-economic fundamentals, stable and peaceful democracy, warm climate and warm hospitality.
He added that the choice of Ghana to host the Secretariat of the Africa Continental Free Trade Area (AfCFTA) also points to Ghana’s favourable outlook.
What will push more FDIs?
Cabinet, according to Mr. Ofori-Atta, has approved the formation of an inter-ministerial committee to provide policy guidance for the FDI agenda.
The mandate of this committee, he explained, shall be to put in place a comprehensive strategy and plan of execution on attracting FDI flows going forward as well as identify and package all the various initiatives and policies that are already in place that help make Ghana an attractive place to do business and hence to attract FDI flows.
In addition, he noted, the Ghana Investment Promotion Centre (GIPC) Bill will be amended to align it with international best practice, and GIPC will be restructured and better resourced with human and financial capital.
These comprehensive strategies and initiatives, he said, will not just harness and attract FDI to help accelerate growth but can double FDI every year for the next ten years and translate into increase in GDP growth of over the current GDP projections of approximately 6percent annually over the medium term.
Benefits already coming
The Finance Minister pointed out that Ghana is already beginning to leverage its advantages to generate a lot of interest from global multinational companies. “We have so far attracted investments and commercial interests from global automotive companies, including Toyota, Volkswagen, Nissan, Renault, Hyundai, Sinotruck, and Suzuki,” he said.
He added that government has already built strategic partnerships with multilateral institutions such as Africa Investment Forum (AIF), Compact with Africa, the US “Prosper Africa”, UK-Ghana Business Council, EU-Africa Business, China’s FOCAC, Japan’s TICAD, Korea’s KOAFEC, the Asian Infrastructure Investment Bank (AIIB) to leverage to attract FDI.
“All these measures on the business regulatory environment and the FDI agenda are part of a broader and ambitious strategy to make Ghana a gateway to business in West Africa and Africa in general; a business, financial, and logistics hub in the region,” he said.