GIPC gets tough on foreign investors

Accra, Nov. 2, 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.