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GIPC gets tough on
foreign investors
Accra, Nov. 2, Ghanadot/GNA - Mr. Robert
Ahomka-Lindsey, Chief Executive of the Ghana Investment
Promotion Centre (GIPC), on Friday said the centre was in
the process of scaling up the enforcement of laws and
regulations guiding foreign investors and businesses on the
local market.
He noted that the law was emphatic about the fact that
foreign investors should not be allowed to do direct selling
on the local market but a number of foreigners were
violating the law.
Mr. Ahomka-Lindsey made the remark at a press conference to
present the third quarter investment report to journalists.
"There has been a laxity in the enforcement of the law for
too long. I think it's about time we scaled things up to
ensure some sanity in the system," he said.
He said the centre was currently recruiting more staff to
ensure sanity in the system, adding that, the intention was
not to weed out those investors but to ensure that they
abided by the law.
"Our job is not to police investors and kick them out for
wrong doing but to ensure that they comply with the rules
and regulations of the game and nothing will stop us from
scaling up our efforts to enforce the law to the letter," he
said.
Statistics available at the GIPC indicated that this year
alone, 17 such companies, some of which were not properly
registered, were closed down. However, 12 had been re-opened
within the last quarter while five remained closed.
The violating organizations were mainly from China, India,
Germany, Holland and Nigeria.
Mr. Ahomka-Lindsey noted that some of the companies were
violating the requirement of how many expatriate staff they
should employ, saying that, investors who brought in between
US$10,000 to US$99,000 were allowed only one expatriate
staff, $100,000 to $499,000, two expatriates and four for
500,000 and above.
"Any company seeking to employ extra expatriate hands must
prove to us that they can't find local people who have the
kind of expertise they are looking for," he said, adding
that companies were also required to seek approval from the
Centre in the event of the replacement of current expatriate
staff.
Mr. Ahomka-Lindsey said the centre was also seeking an
upward revision of the minimum initial investment capital
for foreign investors from the current US$300,000 to one
million dollars.
"We have put our proposal before Parliament and we are
hoping that by the close of the year we would be granted the
mandate to raise the bar.
He said as part of measures to make the GIPC more effective
and accessible to investors and the general public, plans
were afoot to open more regional offices, international
offices, recruiting sector specific personnel to boost staff
numbers from 57 to 108 and also updating staff of foreign
missions on investment promotion's best practices.
"We are also seeking a complete revision of the GIPC Act and
also planning to relocate the Centre to its own office at
the Airport residential," he said.
Mr. Ahomka-Lindsey noted that the total new investment as at
September 30, 2007 was 880 million Ghana cedis, adding that
851 million Ghana cedis constituted reinvestments of
existing companies whiles 29 million Ghana cedis was initial
equity transfers for newly registered companies as compared
to GH 530 million Ghana cedis and 31 million Ghana cedis
respectively in 2006.
"The rate at which investment levels are rising, we are
confident that by the close of December this year, we will
go beyond the one billion dollar target that we have set for
ourselves," he said.
Mr. Ahomka-Lindsey said the huge reinvestment figures
indicated that investment activities within the country was
higher than what came in from abroad, adding that it was
therefore necessary for the tax exemption net to be widened
to benefit reinvested capital instead of just initial
capital.
The GIPC Quarterly Report indicated that out of a total of
80 new projects registered within the third quarter, 26 were
in general trading, 22 in manufacturing, nine in service,
eight in tourism, followed by agriculture with six, building
and construction, five and export trade, four.
Manufacturing however, topped the list in terms of value,
with 127 million Ghana cedis representing 72.34 per cent of
the total of 175.3 million Ghana cedis for that quarter.
The report said 14 of the 80 new projects were fully
Ghanaian owned, 40 were fully foreign owned and the
remaining 26 were Ghanaian-foreign partnerships.
In terms of regional distribution, the report said Greater
Accra topped the list with 67 projects, Ashanti and Central
regions had four projects each Volta region had three
projects and two in the Western Region. The five other
regions had none for the quarter.
It said for the quarter, foreign direct investment (FDI) was
GH 172 million Ghana cedis with a local component of 1.7
million Ghana cedis.
According to the report, those investments were expected to
generate a total of 3,387 jobs, comprising 3,078 jobs for
locals and 309 for expatriates, but the GIPC boss pointed
out that the centre had challenges monitoring the field to
ensure that those jobs were provided.
He said investors were usually given license on their
promises but the centre would henceforth go beyond reporting
the expectations to capture the actual employment figures.
GNA
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