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Business News of Monday, 15 July 2013

Source: The Scandal

Officials plot to torpedo GIPC Bill?

Information reaching the Scandal say some Officials are working assiduously to torpedo the GIPC Bill. They are calling up Foreign Trading Companies and demanding money from them to stop the bill from going through in Parliament.

By inference, it shows that whoever these officials are, they certainly must be people who wield some influence either in the Executive, Parliament or belong to an emerging new class of lobbyists. The information we have is that some calls have gone through to some foreign trading companies and promises are being made to stall the new law in lure of financial rewards.

The Ghana Investment Promotion Centre is promoting a new law in Parliament that seeks to empower indigenous Ghanaian businesses whilst restricting foreigners from engaging in the retail sector. Under Sections 26 and 27 of the bill, some activities are reserved for Ghanaians and Ghanaian owned enterprises.

Among other things, section 26 (1) states that “a person who is not a citizen or an enterprise which is not wholly owned by citizens, shall not invest or participate in; a) the sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall or at any place”.

Section 27 (2) of the Bill says that: “despite subsection (1) a trading enterprise that is principally engaged in the purchase and sale of goods shall not be wholly owned by a person who is not a citizen but shall operate by way of a joint venture with a partner who is a citizen.”

Section 27 (3) also states that: “A person who is a citizen in an enterprise referred to in subsection(2) shall (a) have not less than thirty percent (30%) equity participation in the joint enterprise; and b) shall not Transfer the equity participation to a person who is not a citizen”. Capital equity has now been increased from 300 thousand to One million dollars.

Mrs. Mawuena Trebarh, the Chief Executive Officer of the Ghana Investment Promotion Council (GIPC) appeared before the Parliamentary Select Committee on Trade on Friday March 15, 2013 to present the new GIPC Bill.

Trade and Industry Minister, Haruna Iddrisu, who moved the motion for the bill in Parliament, said investors will, however, be guaranteed incentives.

He said the legislation was necessitated by some “significant economic and investment development” and believed the law will address these “short comings in order to position Ghana, not just as the destination to do business, but the hub for business for West Africa.”

It will also enable the government to respond to the growing drive of unemployment and create opportunities for its citizens, he affirmed.

Emphasizing the need for the country to protect indigenous businesses, Haruna Iddrisu stated that businesses such as hairdressing and printing of scratch cards would be reserved for Ghanaians.

Foreign Direct Investment accounts for 11 percent of global gross domestic product and some are asking if the agitation by some foreign companies operating in the country will affect the country’s drive for FDI's.

A fortnight ago, the Chairman of the Trade and Industry Committee of Parliament, Alhaji Amadu Sorogo, was reported as saying that some foreign investors in the country are protesting government decision for them to cede 30 per cent of their businesses to Ghanaians under the revised GIPC Bill which is currently in Parliament for consideration.

In an interview with Joy News, Alhaji Amadu Sorogo gave the assurance that the House will adopt the best approach in debating on the bill. He is hopeful the bill will open up investment opportunities to both local and foreign investors.

Alhaji Sorogo also debunked claims that the bill will scare away investors, but remarked that no law will satisfy everybody 100 per cent.

President of the Ghana Union of Traders Association, George Ofori, has also told Joy News they are “very happy” about the proposed measures to protect Ghanaians in the retail sector.

He, however, observed that “monitoring and supervision” could be a militating factor against the successful implementation of the law.

He also rejected claims that the increase in the capital equity to one million is on a high side. He said they had initially suggested one and half or two million dollars.

He is hoping that the bill will be passed by the close of the week.

Meanwhile, Member of Parliament for Tafo Pankrono in the Ashanti region, Dr. Anthony Akoto Osei rejected provisions in the bill that allows deputy ministers to serve on the board of the GIPC.

He asked government to shy away from appointing ministers to boards describing the precedent as “dangerous”. He is suggesting that directors at ministries should rather be made to replace ministers whom the institutions are supposed to report to.

Institutions such as the GIPC should “be technically driven and not politically driven”, he cautioned.

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