Investment law needs review - Wayo Seini

Accra, Dec. 13, GNA - Professor Wayo Seini, Senior Fellow at the Institute of Economic Affairs (IEA) on Thursday said the Ghana Investment Promotion Centre (GIPC) Act 478 which was passed to promote and attract foreign investment into Ghana needs to be drastically revised.

He said: "As at now, the Act appears to be obsolete," and that there was the need for an entirely new Act that would take into consideration not only the economic environment and requirements but also the prerequisites for attracting foreign and domestic investors. Prof. Seini was giving a presentation on the topic: "Review of the Ghana Investment Centre Act 1994, Act 478" at a roundtable organized by the IEA.

The discus sion brought together executives of the Ghana Union of Traders Association (GUTA), Internal Revenue Office, Bank of Ghana and the staff of GIPC and economic consultants. Prof Seini said, "It is obvious that the Ghana Investment Promotion Act, 1994, Act 478 contains a lot of articles and sub-articles that offer too much to would be foreign investors and too little to stimulate domestic savings, investment and growth of indigenous enterprises." He said the Act was probably passed at a time when there was the need to virtually beg for foreign investors to come to Ghana. Quoting some aspects of the Act, Prof. Seini said Article 19(3) tend to contradict the schedule of enterprise that were reserved for Ghanaians, adding; "The sale of anything whatsoever in a market, petty trading, hawking or selling from a kiosk at any place is reserved for Ghanaians.

"In any case of trading enterprises involving only the purchasing and selling of goods which either wholly or partly owned by a non-Ghanaian, there shall be an investment of foreign capital or its equivalent in goods worth at least 300 hundred thousand dollars." Prof. Seini observed that the provisions had been too liberal in many respects.

"Nevertheless, for a country to grow and develop, investment needs not only be entirely foreign. The need to encourage domestic mobilization of savings and investments is crucial to the development of a nation."

He called for a hard core of indigenous entrepreneurs who would lead the way and guide would be investors to establish in Ghana rather than relying heavily on public institutional efforts. Prof. Seini noted that the threshold of foreign currency requirements were low at all levels and said: "if you are talking about attracting investment in this day and age, you should be thinking about millions and billions of United States dollars. Mr Robert Ahomka-Lindsay, Chief Executive Officer of GIPC, said the Act would be reviewed to cover everything from nuclear power station to the slippers seller.

He said the involvement of Ghanaians in major trading activities was important but had to be handled carefully. "There are fundamental questions of policy that needs to be addressed. We have a draft law and we want inputs from stakeholders" He reminded the country that, "no country has developed at any level by trading alone."

Mr Kwesi Ahwoi, Trade and Investment Consultant, admitted that there was the need for a change but explained that the 1994 Act was drafted in an environment that demanded a call for foreign investors. Other participants shared diverse views on the need to review the law but ultimately agreed that there was the need for a review. 13 Dec. 07