39 new free zones companies to inject US$230m into economy

new free zones companies
  • as GFZA launches Investment Week

Thirty-nine new free zones companies licenced to operate within the last year and a half are expected to inject some US$230million into the economy, says Chief Executive Officer (CEO) of the Ghana Free Zones Authority (GFZA), Ambassador Michael Oquaye Jnr.

“Since I took over as CEO, some 39 new companies have been licenced and they are expected to inject an estimated capital of US$230million into the economy. In addition, the estimated export earnings from the 39 companies is US$529million from an estimated production value of US$436million. I am also happy to report that the cumulative exports from the Free Zones enterprise since the programme’s inception stood at US$27billion as of 2020,” he said.

Amb. Oquaye Jnr. was speaking at the launch of 2022 Investment Week, a week-long celebration that seeks to shine more light on activities of the authority, the concept of special economic zones, and drive further investment into the economy.

He noted that as the country is currently grappling with a balance of trade deficit and depreciation of the currency, it is imperative that Ghana increases its exports to earn needed foreign exchange to stabilise the cedi; and thus the importance of Special Economic Zones (SEZ) championing an export-led strategy cannot be overemphasised.

“Export-led industrial growth is one of the most appropriate strategies to achieve economic development; this has been the mandate of the GFZA. Thus, the Free Zones programme’s importance in reversing our balance of trade deficit and depreciating cedi is vital.”

Free Zones not for only foreigners

Amb. Oquaye Jnr. stressed that Ghanaian companies also have the potential to take advantage of free zones incentives and make a mark in the international market. Currently, the total number of active companies is 217.

Out of the 217 active companies 72 are wholly Ghanaian-owned companies, representing 33percent; 74 are wholly foreign-owned companies, representing 34 percent; and 71 are joint ventures, representing 33 percent.

“I am giving this breakdown because the Free Zones programme has been misconstrued as mainly favouring foreign investors. On the contrary, the programme is open to all investors, both foreign and local. Moreover, with the opportunities that AfCFTA also offers, we are encouraging Ghanaian-owned businesses to take advantage of the 1.3 billion African market to expand their activities. The impact of these achievements on the economy cannot be overemphasised.”

New SEZs in the offing

With regard to the development of designated SEZs, the authority, he says, has signed a memorandum of understanding with a private developer for developing about 1,500 acres of land designated at Yabiw/Shama in the Western Region.

The proposed investment, according to him, is estimated at US$250million to US$300million. It is expected to provide world-class infrastructure such as roads, electricity with a dedicated power plant, sewage treatment plant, container depot, office complex and residential complex, among others. In addition, the project when completed will lead to thousands of jobs and increased foreign exchange earnings for Ghana.

Regarding the designated processing zone in the Ashanti Region, commonly associated with the Boankra Port or the Greater Kumasi industrial project, compensations for the land and economic activities have been finalised.

AfCFTA/GFZA partnership

Amb. Oquaye noted that the GFZA recognises the AfCFTA’s potential in attracting market-seeking investments and encouraging local businesses to export to the African market.

“In pursuing an export-led industrial growth strategy and given the enormous opportunities AfCFTA and the world at large provide, the problems of unemployment, low export earnings, lack of value addition to our natural resources, lack of diversification of our export products, and being an insignificant player in the continental and global value chains can be solved.

“To achieve this objective, the GFZA has set up an AfCFTA desk. The Authority is collaborating with the AfCFTA National Coordination Office (NCO) to develop a GFZA/AfCFTA strategy to integrate AfCFTA into our activities. If there are any lessons to be learned from the COVID-19 pandemic, it taught us that deploying technology is the way to go. Thus, most of the authority’s approvals have been migrated online under the ICUMS single window.”

Achievements, CSR

Water challenges that used to bedevil the Tema EPZ have now through collaboration with the Ghana Water Company improved drastically, with supply increasing from 30 percent to 75 percent at present. Currently, water storage capacity at the enclave has also been improved.

In addition, the authority is in talks with the Ghana Gas Company to supply gas directly to the Tema EPZ as an alternative energy source for the companies. “I am pleased to tell you that these talks have concluded positively and are awaiting implementation. This will again contribute to a ‘zero carbon footprint’ as previously espoused.”

Regarding security, the authority procured two motorcycles for the Kpone Police Command to enhance patrol of the enclave and to enhance security. The authority identified breast cancer as a serious issue affecting women. As a result, it instituted a breast cancer awareness project during the Breast Cancer Awareness Month of October. The next addition will be prostate cancer, which is prevalent among men.

“As an additional service, we have recently introduced the concept of ‘Aftercare’ to provide value-added services to existing free zone enterprises within our mandate to make their investment in Ghana worthwhile. I have already embarked on regional tours to visit some free zone companies with the team, to understand their issues and assist in resolving them.”

The celebration

This year’s celebration is under the theme ‘GFZA: Championing Export-Led Industrial Growth in the Context of AfCFTA and World Trade’. The theme, he says, was chosen to reflect government’s focus on export-led industrialisation and the Africa Continental Free Trade Area Agreement’s (AfCFTA) implementation.

The week-long celebration runs from December 5-9, 2022. The celebration will see the GFZA engaging the media and business community through roadshows, one-on-one interactions, interviews, organised enclave/SEZ visits and many more.

The celebration will climax with a CEOs’ networking session to be attended by senior government officials, ministers of state, CEOs and captains of industry at the Marriott Hotel on December 7, 2022.

The 3rd Annual Ghana Free Zones Investment Week meeting will discuss a pathway for supporting exporters to optimise exports within Africa and beyond.

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