Business News of 2014-03-04

Government allays fears of investors

The government has assured investors of its commitment to continuously make Ghana an attractive investment destination.

“We remain committed to improving our investment landscape in order to attract more foreign direct investments to enable us to deal with the fiscal deficit, the unacceptable depreciation of the cedi which affects values of exports and imports alike,” the Minister of Trade and Industry, Mr Haruna Iddrisu, told the Graphic Business in an interview.

He said the government was aware of the cloud of uncertainty in the minds of some investors in the country following the measures announced by the central bank to halt the declining cedi and stop the dollarisation of the economy.

But Mr Iddrisu said “We do assure them that Ghana remains a safe haven for investments”.

As part of the BoG measures, it has banned commercial banks and other financial houses from issuing cheques and cheque books on foreign exchange accounts (FEA) and foreign currency accounts (FCA).

It also directed that no bank should grant a foreign currency-denominated loan or foreign currency-linked facility to a customer who is not a foreign exchange earner.

The central bank further prohibited offshore foreign deals by resident companies, including exporters in the country.

Again, over-the-counter cash withdrawals from foreign exchange and foreign currency accounts not exceeding US$10,000 shall only be permitted for travel purposes outside Ghana or its equivalent in convertible currency per person per travel.

The directives also noted that all undrawn foreign currency-denominated facilities shall be converted into local currency-denominated facilities with the coming into effect of the notice.

However, existing fully drawn foreign currency-denominated facilities and loans to non-foreign exchange earners are to run until expiry.

The Trade and Industry Minister noted that the government fully backed the decision taken by the BoG, adding that “that is an irreversible and worthy decision but we would find those aspects that will guarantee the continuous flow of foreign direct investment, one that assures investors of an opportunity under the laws of Ghana to repatriate their profit”.

He said the clarification of the foreign currency account as against the specific issue dealing with foreign exchange generally has been done.

“Why must we have an economy in which everything, whether in the payment of rent, payment of children’s school fees, procurement of goods and even sometimes services within our country, is conducted in foreign exchange or a foreign currency?” he asked and noted that “that is not an unacceptable phenomenon globally, and its universal that in every country, you need to provide that discipline”.

He was optimistic that the assurances would calm the nerves of investors in the country to enable them to keep their investments in Ghana.