Ofori-Atta: EU ban lifting to boost FDIs

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Economy shows strong growth prospects
Ken Ofori-Atta is Finance Minister

Finance Minister, Ken Ofori-Atta, says Ghana being taken off the Financial Action Task Force (FATF) ‘grey list’, is a boost to the country’s foreign direct investment as it renews confidence of the international community in Ghana’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime.

The FATF unanimously agreed at its plenary meeting held on June 23, 2021 that Ghana had satisfactorily completed her action plan after the International Cooperation Review Group (ICRG) had submitted their report.

At a press briefing held on Wednesday at the Ministry of Finance, Mr. Ofori-Atta said: “This is great relief for the country, considering the economic consequences suffered by the country while on the list. This will boost confidence in the integrity of our financial environment and also boost foreign direct investment.”

He added: “When we talk about investment and the country has gone through such an exercise, you are also going to have flight-to-quality and Ghana is going to be seen as a destination of clean investment, which is going to be helpful for us as we go into the future.”

In 2016, Ghana was subjected to a Second Round of Mutual Evaluation by the Inter-Governmental Action Group against Money Laundering and Terrorist Financing in West Africa (GIABA). At the time, Ghana was the first among her peers in the West African sub-region to have gone through the Second Round of Mutual Evaluation.

Even though this round of mutual evaluation showed some progress over an earlier one in 2009, there were still significant gaps that needed to be addressed. Ghana was therefore placed under observation by the International Cooperation Review Group (ICRG), one of the technical groups of the FATF charged with the responsibility of identifying, reviewing, and monitoring jurisdictions with AML/CFT deficiencies that present a risk to the international financial system.

The ICRG and Ghana developed a two-year Action Plan spanning 2019 – 2021 with timelines, to address the deficiencies.

Following the ICRG plan and FATF acknowledgment, the European Union also added Ghana to its list of high-risk third countries with strategic deficiencies in their Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime as a result of Ghana being on the FATF list. Effectively, with the lifting of the ban by the FATF, the EU is also expected to lift its ban as well.

“It was not because of flows of illegitimate money through our systems but really strengthening of the institutions to ensure that this does not occur again. We do have the headquarters of the African Continental Free Trade Area (AfCFTA) in Ghana and therefore it gives us this platform for trade and investment. The signaling that we have successfully gone through the mutual evaluation. We have been tested by the international market and found our systems durable and robust for the future,” he said.

“We will continue to support the other countries in the region with this process. We are literally 2 to 3 years ahead of most countries in the region and that is important for us,” he said.

Over the last three years, an Inter-Ministerial Committee led by the Ministry of Finance has been hard at work coordinating key reforms to cure strategic AML/CFT deficiencies.

The reforms include the introduction of the beneficial ownership under the Companies Act, 2019 (Act 992), which requires that any person who has at least 5% beneficial ownership in companies in the extractive sector, real estate, used car dealerships, financial sector and gaming industry must be registered as a beneficial owner.

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