Mr. Appiah Kusi Adomako, Centre Coordinator-CUTS International, Ghana, has urged government to review the minimum capital requirement for setting-up foreign businesses in the country.
He said as part of efforts to attract foreign investors, most countries in the West Africa sub-region had removed the minimum capital requirements for foreign investors.
He cautioned that if Ghana maintains the minimum capital requirements, it could be losing out with foreign direct investments to other countries in the sub-region.
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 US$300,000 to US$1million, while foreign investors who participate in joint-venture enterprises have to show a minimum capital of US$200,000 with wholly-owned foreign enterprises showing a minimum capital of US$500,000.
Mr. Adomako made the appeal on Thursday at a Validation Workshop to review and discuss the report of a study commissioned by the World Economic Forum in conjunction with the Ghana Investment Promotion Centre (GIPC) to understand Investment Facilitation for Sustainable Development in Ghana.
CUTS is a public policy research and advocacy think-tank working in areas of consumer welfare, competition policy and law, economic regulation, trade and development, good governance and agricultural and public-private partnership.
Mr. Adomako said as the GIPC Act is currently being reviewed, there is need for them to take a second look at the issue of minimum capital requirement for the setting of foreign businesses in the country.
He said when setting up businesses in certain sectors of the economy, such as ICT, one does not necessarily need to have a minimum of US$500,000 before starting.
He recommended that in order to facilitate growth of the agricultural sector, the GIPC should have an agriculture attaché at Ghana Missions in countries where a large number of agricultural investors are coming from.
With regard to the study report, Mr. Adomako said it looks at how Ghanaians do things to ensure that investment comes with sustainable and development impact to become a win-win for both.
The study consulted captains of industry, foreign investors, research and academic institutions, business associations, trade associations and government agencies.
Dr. Matthew Stephenson of the World Economic Forum said the study was undertaken within the private sector and civil society space, as to what measures could be employed to facilitate investment in aiding sustainable development outcomes.
He said Ghana was chosen for the study project because the country attracted most foreign direct investment in the West Africa sub-region as far back as in 2018, which had now plateaued; hence the need to scale-up.
The second reason was that Ghana has prioritised food and agriculture as effective for development, and this project is about facilitating investment in food and agriculture.
“The third is that the GIPC has the legal mandate to do both promotion and facilitation, and at the same it is reviewing its act to modernise it – and this is just perfect timing,” he added.