Interview: George Aboagye
How can Ghana maintain its appeal as an attractive environment for investments?
GEORGE ABOAGYE : In order to have an attractive investment climate there must first be a legal framework acceptable and helpful to the development of business. Maintaining a business friendly environment also involves developing infrastructure in many areas, such as improving communications networks, warehousing availability and stable energy connections. This is also the reason why the government has put together an ambitious public-private partnership strategy. If you are developing infrastructure, there is nothing wrong with using private funds. So the government is increasingly recognising the usefulness of private capital to help finance certain areas of development.
Incentives are also an underlying factor. They are provided for improving activities in mining, agro-processing, agriculture, information and communications technology, property development and energy. These are all means of maintaining a good investment environment, which Ghana has shown it can achieve.
To what extent is Ghana attracting investment interest, including from neighbouring countries?
ABOAGYE: We still need to consider Europe and the US as major sources of investment, independently of current conditions. Europe may be going through difficulties, but that can be an advantage for countries like Ghana. For example, a factory in Europe that needs to be closed down because of labour costs or some other rising input costs, can be made viable in Ghana instead. We are seeing a lot of international companies opening liaison offices here. They are considering shifting some of their production here as well. That is good for us, because it facilitates a transfer of knowledge. This has been the case in Asian countries. So Europe’s predicament may be Ghana’s advantage.
In terms of accessing the West African sub-regional African markets, we have protocols that we have not been able to develop and adhere to. Political decisions aimed at increasing cross-border trade with our neighbours have been made. However, in terms of the physical movement of goods and services, there are stil many obstructions. So it is still challenging for companies to access the larger region. But, in the long run, there is huge potential in this market of 300m people.
In what way will the depreciating cedi affect Ghana’s overall investment climate?
ABOAGYE: For the same people bringing money and resources into Ghana at the same price as last year, I think this is a bonus for them. Labour has not appreciated so much in terms of value, but the currency has depreciated. That is a plus for investors. But we have to look at other variables, like rent, electricity, water and all the other amenities you need to run a business. They have not hugely shifted in price. For countries that need to export this is an advantage. The goods go abroad and companies get their money there.
The problem for government is that Ghana imports consumer items. Because the manufacturing base is only 10% of GDP, we are not producing much for our own consumption. This is where the crunch is, and where most of depreciation’s impact will be felt.
How will foreign investment in agriculture help grow production and balance income distribution?
ABOAGYE: Attracting investment to our agricultural sector is a question of available land. Large tracks of arable land are what secures investment for production and processing of agricultural goods. So the government is working on increasing irrigated lands on the Accra plains, and the World Bank is supporting this project with about $100m. There is potential to expand palm oil production and other agricultural areas. The big challenge is to facilitate land availability and ease the acquisition process, so that investors can be assured of securing enough. The north of the country has huge tracks of land, and so the government will definitely encourage agricultural development in the north.
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