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Opinions of Sunday, 11 April 2021

Columnist: Joel Savage

The collapse of financial institutions and corruption in Ghana hinder investments

File photo: The number of investors to boost Ghana's economy dwindling File photo: The number of investors to boost Ghana's economy dwindling

Ghana's potential is quite high in producing large quantities of gold, timber, cocoa, aluminum, oil, etc, giving the country international recognition as an attractive place for foreign investments.

Having large opportunities in the agricultural and metallurgical sectors, and many others, Ghana should have been one of the richest countries in Africa, to attract an inflow of foreign direct investment into the economy.

Unfortunately, the number of investors to boost Ghana’s economy is rapidly decreasing every year, due to various factors, ranging from corruption to mistrust in the judicial system.

The chronic corruption in Ghana has affected all its infrastructures, including the country’s judiciary system.

Since gaining independence in 1957, Ghana has worked hard to create a market economy to maintain moderate inflation and a relatively low unemployment rate in the past.

However, the mismanagement of the country’s finances by successive governments has ranked Ghana to be one of the most corrupt countries in the world.

Since corruption has been the existing obstacle to investment in Ghana, foreign investors and many Ghanaians in the Diaspora are no longer interested to do business in Ghana.

Moreover, many of them have run into frauds by either losing lands sold to many buyers by the local chiefs and land guards with impunity. The Ghanaian government is yet to find solutions for its land issues.

Despite the encouragement towards investments to build the economy, the Ghanaian government rather discourages investors by introducing high taxation and customs duties at the harbor and ports in the country.

As a matter of fact, the collapsed financial institutions in the country actually changed the mind of many investors both inside and outside the country.

Moreover, in a country that no one takes responsibility for a crime or financial mismanagement, it will be very silly to ignore risks to invest.

Most importantly, every investor wants to be sure that Ghana must not just protect assets but also fights to ensure that nothing happens to their investments.

Unfortunately, that security or assurance doesn’t exist in Ghana. If investors don’t experience fluctuations of currency, the collapse of the bank is underway.

If an investor plans to invest in a business in which costs are incurred in foreign currency, the devaluation of the money becomes the main problem for achieving a profitable investment. In this situation, it is extremely difficult to plan for future profits.

Ghana has no Anti-Corruption Plan; therefore, every politician that promises to fight corruption rather becomes infested with the disease, so Ghanaians have lost total confidence in politicians.

The only thing that can boost investment in Ghana is to reduce taxation and the high tariffs imposed on goods in the country but they are not ready to do that because of corruption.

These harsh problems facing investors and the government's inability to deal with the situation summarizes everything that Ghana can be a country without any future, despite being one of the richest resource countries in Africa.