Against all odds, some people are very optimistic about the future of Ghana’s economy. Mr. Yofi Grant, the CEO of Ghana Investment Promotion Centre (GIPC) is one of them. Top Guide met with him to hear how the country could also gain from recent setbacks.
response to the global crisis GIPC has led the campaign ‘Grow In Ghana, Grow With Ghana’. What has been its purpose and has it already borne any fruits?
The global crisis, actually, presented both an opportunity and a major challenge to any country. For us it was a question of how we ensure that lives and livelihoods are saved. Looking at the whole conversation we realised that we must do things ourselves. We have the resources, the people and the ideas. Why don’t we encourage businesses to grow in Ghana and to grow with Ghana? Therefore being resource rich, democratically stable and having what the International Monetary fund projected to be the fastest growing economy in 2019, the concept of the Grow in Ghana Grow with Ghana campaign has been to leverage on the country’s natural resources and environmental opportunities to attract investors particularly from within, to stimulate economic growth and unlock opportunities while endearing a mindset for patronizing Ghanaian brands. Moreover, the campaign encourages value addition which helps fulfill the President Akufo-Addo’s keen desire to transform the economy from the export of raw materials to value addition and production. Since then it has been amazing, and we have seen quite a number of indigenous companies registered at GIPC. We have about 1.4 billion GHC of indigenous investments back into the economy and that is very motivating. Through this campaign we also offer partnerships and linkages outside. For example: We signed a European agreement that give us some tax free trade lines. If we open up our economy and we encourage producers to come to Ghana, we can manufacture for the export and African market.
Does the programme ‘One District, On Factory’ (1D1F) also have a place in your campaign?
Absolutely, 1D1F is a policy that encourages indigenous local manufacturing. It’s about setting up industries in each of the 260 districts we have nationwide, using the resources of that area. It is the foundation of a more industrial economy. The President has made it very clear that we need to change the way we have run our economy. When you look at the continent, you see enough land and agriculture. However, what we don’t have is manufacturing. We cannot be a wealthy continent, and yet our people are poor because we have to import everything. We have the resources and as such we should add value to our raw materials and then export or sell it ourselves. The 1D1F therefore creates the foundations of an industrialization program, where the government has defined an ecosystem of transformation with a clear partnership between public and private sector to create jobs and factories, upscale education and ensure food security. The execution of this ambitious plan thus establishes the right infrastructure for an industrialized country that everybody believes in.
What role is GIPC playing in the Government policy to boost industrialization in different sectors of the economy, like for example the arrival of the Volkswagen or the Sinotruck assembly plants?
GIPC is the country’s investment promotion agency. Our job is first to market the country and the investment opportunities that are here. Ghana is literally in the middle of the world. Logistically, we are perfectly positioned, and we are rich in resources. We have cocoa, gold, minerals, gas, bauxite, lithium, manganese etc. So, if you want to operate at the higher end of the value chain of your assets, you have to add value to them. Therefore, the Ministry of Trade & Industry formulated the 10-point industrialization plan in order to make Ghana the best place to do business in Africa. In doing so, we came with the concept of industrial parks for certain specific economies, such as the automotive industry, the cocoa value addition industry, the petrol chemical industry and so on. There are ten of them. For the automotive sector, we created the space and a framework to attract manufacturers – not just to assemble cars for Ghana, but for the whole of the sub region. GIPC had been talking to Volkswagen for close to three years. Now we actually see cars assembled by Volkswagen rolled out on the streets. We also met Sinotruck in China and they were inspired after our engagement. After testing the market, they decided to assemble here. I ‘m also very happy to say that Nissan and Toyota have acquired licences to assemble here. Next on the line may be Suzuki, Honda and Zonda from China. So, I think we are well on track.
How did the pandemic affect Foreign Direct Investments (FDIs) into Ghana and what are the planned post-Covid interventions?
During COVID, government revenues were virtually wiped out. Companies had to close, ports were shut down and there was no movement of people, goods and services. All of that was on the backdrop of major global political disruptions such as Brexit and the US-China trade wars. As such, we expected a drop in FDIs. But surprisingly, in the first quarter of 2020 FDI was up as compared to the same period last year and by March we had already registered 47 projects with a total FDI component of 180 million dollars. Similarly, FDI flows during the second quarter of 2020 deviated from the global expected trend of declines resulting in a significant increase in inflows for the first half of the year. The total investments recorded in the first half of 2020 amounted to US$869.47 million with total FDI value of US$785.62 million representing over 400 percent increase in FDI compared to the same period last year, which was very encouraging. Especially considering what happened worldwide. During this period we also recognized the need to plan for the future. So, we are working with the Ministers of Finance, Trade & Industry, Agriculture, Planning, and a special committee to look at what
we should do now to stabilize and revitalize the economy. We’ve subsequently came out with a document called the COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) Programme. It is a 100 billion GHC program, stretching from 2020 to 2024. The government will provide 30 percent of the funding and the remaining 70 percent will come from the private sector. And that is where GIPC comes in with clear programs in specific areas that we have targeted to help raise these funds. Again, we are already speaking with prospective investors to ensure that we can execute this plan down to the last letter.
With the AfCFTA Secretariat officially based in Ghana, the Government’s vision is now to position the country as the international hub for African Trade. What is GIPC’s role in implementing this plan?
Well, we have a very significant role to play because trade is the twin brother of investment. You need to have a consistent policy of investment to boost trade. And when you have the headquarters of AfCFTA, right here in Accra, you must take up the responsibility of driving that agenda. If you look at the continent, intra-Africa investment is less than 5 percent while intra-Africa trade is somewhere around 18 percent, which is way below our potential. In order to change this dynamic, you must have a certain critical mass of investment to create growth, invest in manufacturing, infrastructure and people. For instance, Ghana is partnering with Ivory Coast to make sure that in the near future we export not more than some 35 percent of our cocoa beans and a good 65 percent will be processed. I will be very happy to see my chocolate all over Africa.
The Year of Return in 2019 attracted a lot of shareholders and potential investors; the “Beyond the Return” initiative, launched by the President at the beginning of 2020 and set to last for the next 10 years, promises to bring tangible results in terms of FDI. What makes Ghana an attractive investment destination for the diasporans?
It was good to commemorate the arrival of the first slave ship that hit the shores of Virginia in the US, 400 years ago. It was spiritually uplifting and there was a real partnership with the Diaspora to contribute to the development of the continent. If you look at the annual remittances from the diaspora, it is somewhere around 3 billion USD. Informally people estimate it is about 5 billion USD and therefore it’s a major drive in the local economy. So, it is an area we are focused on and here at GIPC we have set up a Diaspora investment desk to harness the opportunities and embark on targeted promotional activities to attract Diaspora direct investment and foreign direct investment. To the global community, we can summarize the Ghanaian story into three O’s: Opportunity, Openness and Optimism. Opportunity, because we are resource rich. Openness, because we are politically stable and believe in the rule of law and lastly, we are Optimistic. Through significant reforms, proper planning and better debt management, under the excellent leadership of the president Nana Akufo-Addo, Ghana’s GDP growth has gone up and for the past three years averaged at 7 percent. Ghana has been pointed as the best place in West Africa to invest in. So we are very optimistic. If we sustain the energy we have right now and we are able to execute our plans, then the story in the next coming years will be a story that everybody will be proud of. ■