Stakeholder consultation on the review of the Ghana Investment Promotion Centre (Amendment) Bill, 2023.

14-06-2024

Stakeholder consultation on the review of the Ghana Investment Promotion Centre (Amendment) Bill, 2023.

Dear GNBCC Member,

Thursday the 13th of June GNBCC’s GM was invited  to the GIPC's stakeholder consultation on the review of the Ghana Investment Promotion Centre (Amendment) Bill, 2023. Under this article you find a link to the Amendment Bill plus supporting letter of HE Ofori Atta.

The morning was opened by Mr.  Yaw Amoateng Afriyie , deputy CEO of GIPC he spoke a word of welcome. The presentation on the Ghana Investment Promotion Centre (Amendment) Bill, 2023 was done by Mrs  Naa Lamle Orleans-Lindsay , Head of Legal. She explained that this is the 4th time the GIPC law will be amended, the initial act was established in 1981 , the 2nd law came out in 1994, the 3rd in 2013 . The text in the act of 2013 remains the basis for the amendments in this 2023 bill which is now in parliament. This process already started after the 2013 law was passed and became through the change of times more urgent – this has to do with the digitalization, changed  acts and laws from Ghana’s neighbours, international  treaties such as AfCFTA etc.  . Ghana wants to become competitive globally as well as locally when competing for foreign investments. At present the majority of foreign investment ends up in other countries due to the unfavorable and negative conditions for foreign investors compared to the rest of Africa.

The most important changes are that the GIPC becomes the GIPA – Ghana Investment Promotion Agency – this is because an Agency can also regulate (by law) while a Centre cannot. Regulating, supervising, monitoring offenses, issuing penalties etc. – under the new bill GIPA will be mandated by a dedicated Minister (instead of falling under the President’s Office with no dedicated Minister responsible) . GIPA has several priority areas of investment ( see also https://www.gipc.gov.gh/priority-areas-for-investment/ ) . All these investment areas have their own list of activities reserved for Ghanaian citizens – so called local content rules – for this reason GIPA has repealed their list of activities reserved for Ghanaian citizens only. In the last list of 2013 you could find hawking, barbershops, selling of scratch cards, sachet water, pool betting and lotteries etc.  GIPA is not in a position nor is it their task to enforce these rules.

After this session the stakeholders had the opportunity to ask questions. The 1st question asked :  will the future GIPA overrule local content rules of for instance Mineral Commission, Energy Commission, National Communications Authority, Petrol Commission etc.  The answer is no – as a future investor in for instance energy you have to liaise with the Energy commission concerning the local content rules etc. Any local content rules in this new GIPC bill have been removed ; as a future investor you have to liaise with the sector you want to invest in because every sector has its own laws. If you enter Ghana as a Bank you have the investment rules and minimal capital requirements of the Bank of Ghana (BoG) , same as you enter Ghana as an Internet Provider – NCA make the rules. As opposed to Rwanda, where there is one overruling Investment Authority, this remains impossible in Ghana – investments cannot be under one law.

The other important amendment is in section 28 (see pic) the minimum foreign capital requirements. Ghana has been one of the few countries who has a blanket foreign capital requirement, they are the odd country out compared to for instance its neighbours Ivory Coast and Togo.  The  nature of business has changed – we now have the phenomena of for instance digital nomads, e-commerce hence traditional models of investment have changed , times have changed : with a blanket capital requirement you shoot yourself in the foot . This amended bill has removed capital requirements for joint ventures and wholly owned business (was resp. US$ 200,000 and US$ 500,000)  . Only for a trading company the minimum foreign capital requirement remains at 1 million US dollar in cash, cash/goods or goods.

A number of stakeholders present came from GUTA and instead of asking questions they started issuing political statements against most amendments of the GIPC act. GUTA stands for Ghana Union of Traders Association, these comprise of Ghanaian traders who import a lot of goods from outside Ghana (such as China)  to sell or trade in Ghana. They have some valid points but if Ghana wants to reclaim attractiveness for investors , it has to amend this current GIPC act.  

Also on their suggestion to force foreign investors to re-invest at least 30% of their profit in Ghana, Mrs Lindsay answered that Ghana is better to learn from other countries and to create an enabling environment to voluntarily attract investment out of the profit so investors re-invest in Ghana instead of taking out profits from Ghana.

Next to  the above changes there were some other changes – please check the document and the intro letter of the Minister – at a later stage I will publish also on my Linked In account.

Click here to read the amended bill.

Tjalling Wiarda

General Manager

GNBCC | News