Interview: Mawuena Trebarh
Where are the biggest opportunities for investors to participate in Ghana’s economic growth?
MAWUENA TREBARH: Ghana has for a long time been relying on primary commodities like gold, bauxite, cocoa and crude oil as drivers of economic growth. These products accounted for over 80% of its exports with very little contribution from industry. The country however has embarked on extensive reform with the objective of revitalising our industrial structures by developing a competitive manufacturing sector that adds value to local agro-based and other industrial raw materials. Investors looking to participate in the next stage of Ghana’s economic growth could therefore consider value-adding industries across the agricultural and minerals value chain, as well as other services that seek to modernise the sector, and link these up with global supply chains. Other opportunities exist in ICT and IT-enabled services, including business process outsourcing; energy, including the manufacture and supply of equipment providing alternative sources of energy, tourism; and value-added financial services.
How do you expect foreign direct investment (FDI) inflows to evolve in the coming years?
TREBARH: The 2015 edition of the World Investment Report, compiled by the UN, indicates that while global FDI declined in 2014, FDI inflows to Africa remained flat at $54bn. The good news is that global FDI inflows are projected to grow by 11% to $1.4trn in 2015, to $1.5trn in 2016 and to $1.7trn in 2017. There also appears to be a growing trend among investors who are moving away from the traditional primary sectors into more consumer-oriented sectors in an effort to tap Africa’s growing consumer markets. This is reflected in the services sector, which is now contributing 48% to the total FDI stock in the region. Guided by the principle of translating FDI into tangible results, the GIPC has recorded an average of $4.3bn in investments per annum over the last five years.
What can foreign investors do to help ensure community buy-ins with large-scale investments?
TREBARH: FDI will continue to play a very important role in promoting economic development as it provides much-needed financing for the development of natural and other resources that may not be readily available locally. For large-scale investments in sectors like mining or oil and gas, which might sometimes impact existing livelihoods, land rights and the environment negatively, stakeholder and local community buy-in is essential for the success of the investment. The GIPC will always advise strict compliance with the country’s investment and environmental laws, as well as any local content requirements pertaining to the various sectors, as a guide to good corporate behaviour for the foreign investor.
What do you see as the biggest challenge currently facing foreign investors in Ghana?
TREBARH: The Ghanaian economy has suffered some slowdown as a result of the current challenges with energy, which has affected business performance in the country. The government has put in place specific measures to address this. The anticipated arrival of some emergency power barges will boost the current generation capacity by a significant margin. In the next five years, beginning in 2016, it is also expected that an additional 3665 MW of power will be injected into Ghana’s power transmission grid. This will not only ensure energy security for the country but also present an opportunity for the country to become a centre for power supply in West Africa.
The promotion of public-private partnerships (PPPs) is one mechanism the government is leveraging to increase private investments in the country. The goal is to shift from the traditional financing arrangement of funding public infrastructure through the national budget. The imminent passage of Ghana’s PPP law will go a long way to address these issues.
