U.S. Private Investors Suspend Support For Ghana

DESPITE claims that the Government, under J. A. Kufuor, is winning the support of American investors, information's reaching us from Washington point otherwise.

An American agency, the Overseas Private Investment Corporation (OPIC), has now suspended all its support to Ghana.

OPIC provides medium to long term financing to ventures, involving significant US financing of projects, especially in developing countries. We are publishing the piece of information for the benefit of our readers below:

U.S. GOVERNMENT AGENCY, THE OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)

Do you know that this helpful organization has suspended all supports for projects going to Ghana since spring this year? This unfortunate decision was taken against Ghana because NPP Administration subtly hostile attitude towards American investors.

The Overseas Private Investment Corporation is a U.S. Government agency that promotes economic growth in developing countries by encouraging American private investment. OPIC assists American investors through three principle products including insurance, financing, and investment funds. OPIC can support investments in new ventures, expansions of existing enterprises, privatization, or acquisitions with positive developmental benefits.

OPIC provides medium to long term financing (3-15 years) to ventures involving significant U.S. equity participation i.e. at least 25 per cent of the total equity and management participation. OPIC can provide financing on either a project finance or corporate finance basis. Rather than relying on sovereign or sponsor guaranties, project financing look for repayment from the cash flows generated by projects. Therefore, OPIC carefully analyzes the economic, technical, marketing and financial soundness of each project. Corporate financing, on the other hand, looks to the creditworthiness of an existing U.S. owned company to support debt repayment.

OPIC can finance up to 50 per cent of the total project cost for a new venture or up to 75 per cent for an expansion of a successfully operating entity up to a maximum of $250 million per project. The minimum loan amount is $100 thousand.

OPIC also provides political violence and currency inconvertibility. OPIC can insure up to a maximum of $250 million per project with no minimum investment size requirements. Political risk insurance is available for eligible U.S. investors, contractors, exporters and financial institutions involved in international transactions for a maximum twenty-year term at fixed rates for the life of the insurance contract.

NPP Government is more interested in begging for aids which will eventually keep Ghana in perpetual poverty. If the Government was to pursue prudent policy by encouraging Ghanaian to engage in joint venture which OPIC offers, the poverty reduction will speed up. Ghana has to take advantage which OPIC offers to become self reliant rather than depending on welfare from other countries.

It is estimated that the nearly US $500,000,000 direct investments from U.S.A. is being shelved by prospective investors because of this NPP Government problem with OPIC.