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Business News of Wednesday, 17 January 2018

Source: Myjoyonline.com

Corruption allegations in Parliament, Judiciary blot on Ghana's FDI drive - Jonah

Ghana’s drive for increased foreign direct investment will be severely hampered if the country does not fight corruption.

That is the observation of the former head of Ashanti Goldfields, Sam Jonah.

Addressing the 69th New Year School conference at the University of Ghana, the chairman of the Jonah Capital, an equity fund in Johannesburg, South Africa said the "recent allegations of corruption in the legislature and judiciary were most unhelpful."

Worse still, he said Ghana's slump in the corruption perception index in 2016, as well as the 2017 MO Ibrahim index on African governance, could potentially reduce investment in Ghana's economy.

According to him, several laws in the west have made corruption a costly enterprise for companies for which reason investors will not risk doing business in a country known or perceived to be corrupt.

“Nothing puts off and undermines investment promotion than corruption. The UK Bribery Act and the US Foreign Corrupt Practices Act have placed serious and onerous responsibility on investors.

“Evidence of corruption by investors attracts unlimited fines and imprisonment. For this reason, I can assure you that if one has a choice no investor will willingly choose to invest in a country of widespread corruption,” he stated.

Sam Jonah was speaking on the topic “creating an enabling investment environment to attract the private sector.”

Unemployment

A shrewd businessman with investments across many countries Sam Jonah said Ghana’s youth unemployment has reached alarming proportions and required urgent steps to solving the problem

The role of capital in solving the youth unemployment which he described as a “national security issue” is crucial.

However, “capital is flighty, it is nomadic and it is predatory. Its acquisition is highly competitive. Capital will go, stay or leave based on which environment promises the best return.

“Attracting capital is like a beauty contest and the rules are simply based on current competitiveness. Are you as attractive as other competitor destinations and will you remain as such?” he demanded.

For Ghana to remain competitive in attracting capital investment, Sam Jonah said the country must strive to maintain its friendly and politically stable environment.

Interestingly he added, the peace and stability around our neighbours or the lack of it, may well determine whether investors will bring their capital into Ghana.

He cited an example in 1998, when Ashanti Goldfields listed on the New York Stock Exchange, and his team was invited to address fund managers.

However, a CNN footage on the Rwandan genocide in 1993 on the morning of the meeting, took centre stage at the meeting even though Rwanda is several borders away from Ghana.

On the issue of corruption, Sam Jonah believes the country must make the crime highly punishable.

“The issue of corruption is not the absence of laws but the certainty of punishment!” he quoted an observer as saying.