Free Zones soon to be more Investor friendly
The Ghana Free Zones Authority says it is in the process of reviewing its regulatory legislation to make it more investor-friendly. A stakeholder meeting is scheduled for Free Zones enterprises to enable them to make their inputs for the proposed amendment.Addressing some Chief Executives of Free Zones enterprises in Kumasi, Chief Executive of the Authority, Micheal Okyere Baafi, says the law in its current form has become outmoded.
The Free Zones Programme is a government policy to promote export-oriented investment. The meeting with the Chief Executives of the Free Zones enterprises was part of a nationwide roadshow by the Authority to discuss issues peculiar to each region.
Mr. Okyere Baafi emphasizes the need to amend the law regulating the authority’s operation. “Other institutions of governments that do similar jobs like Ghana Investment Promotion Centre (GIPC) has done amendments but we have not. It has been there for the past 20 years but has not seen any amendment. "We think the Act has become very outmoded and we need to make it relevant to modern day business”, he explained.
According to him, an amendment will make people that do business with the Free Zones Authority realise its commitment to doing business. “It is not just about having institutions of government operating and being one-stop-shop to serve its customers, but we should be able to be relevant to the time and be an institution that is ready to do business not only in Ghana but beyond its jurisdiction.”
Under the Free Zones programme, businesses must add value and export, at least, 70 percent of their annual production. The programme combines both the enclave and single factory enterprise schemes to make the whole country accessible to potential investors.
Mr Okyere Baafi says it is imperative to strengthen local businesses to compete on the international market. For anyone that joins the Free Zones program government consciously gives them ten years tax holiday, a good incentive for business growth. “Corporate tax in Ghana is 25 percent and for government to give you ten years tax holiday, it is very phenomenal. Even after the ten years, you will not pay the 25 percent, you will pay only 15 percent which is good,” Mr Okyere Baafi said. In this era where accessing loans or credit facilities from financial institutions is very difficult, such incentives are welcoming for local businesses. Benefiting from the tax holidays, a business can save a lot of money which can be ploughed back into the business.
The Ghana Free Zones Authority is therefore taking steps to boost export-oriented investment in the country. Mr Okyere Baafi, says over-investment in imports stifle the growth of local businesses. The situation is confirmed by World Bank annual figures which show Ghana’s imports continue to exceed its exports every year. The country’s exports decreased to $2.89 billion in the third quarter of 2017 from 3.25 billion US dollars, compared to 2016. Imports, on the other hand, continue to soar from $3.03 billion to $3.24 billion in the same period of 2017.
Mr Okyere Baafi reiterates the need for Ghana to focus on businesses with the export potential to address the imbalance. “Export is the way to go now and the only way to change the business mentality of people who are investors or potential investors. Over the years, we haven’t done well in encouraging the export-oriented businesses so it is an opportunity for us to let people know that there is a lot of benefits in exports,” he said. Such engagement could also create opportunities for local businesses to be part of the international business chain.
Mr Okyere Baafi is positive It will change you from a local business person to an international business person which will give you clouds and certain leverage in the international business circle. Meanwhile, the Board is considering a new unit at the Secretariat to assist companies in the oil and gas industry.
A Research and Business Development Unit is already in place to conduct market intelligence and encourage companies to explore markets beyond the traditional space.