By D.I. Laary
Koforidua, Aug. 29, GNA – IMANI Ghana has welcome President John Dramani Mahama’s proposal to scrap the US$1 million capital requirement for foreign traders, calling it a pragmatic step to boost entrepreneurship, attract more inclusive, and innovation-driven foreign investment.
The announcement was made during President Mahama’s address at the Ninth Tokyo International Conference on African Development (TICAD-9) in Yokohama, Japan.
The conference, co-hosted by the Government of Japan, the United Nations, the World Bank, and the African Union Commission, brought together African leaders to discuss industrialisation, human-capital development, health innovation, and climate-resilient infrastructure.
“We are removing the one-million-dollar threshold not to dilute standards, but to widen the aperture for innovation, job creation, and genuine partnerships,” President Mahama told the delegates.
He said, “Ghana must be open to the world, not just to the wealthy, but to those with ideas and the will to build.”
The Ghana Investment Promotion Centre (GIPC) Act of 2013 currently requires foreign investors in general trading to inject at least US$1 million in capital and employ a minimum of 20 skilled Ghanaian workers.
While exemptions existed for manufacturing, export operations, and long-resident foreign spouses, the clause had long been viewed as a barrier to entry for smaller operators.
In a policy brief shared with the Ghana News Agency, Mr Franklin Cudjoe, the President of IMANI Ghana, said the proposed amendment was overdue.
“The one-million-dollar rule was symbolic, but rarely effective,” he stated.
He added that “What we need is a framework that encourages responsible investment, not one that arbitrarily excludes capable partners. This reform, if paired with strong local-content provisions, could be transformative.”
Ghana’s Foreign Direct Investment (FDI) inflows had fluctuated in recent years as GIPC data, registering that project commitments stood at US$618 million in 2024, while Bank of Ghana balance-of-payments figures placed actual net inflows at US$265 million in March 2024.
The discrepancy stemmed from differing methodologies: GIPC records projected investment costs at registration, while the central bank tracks realised capital flows under the BPM6 framework.
World Bank analysis also showed that FDI as a share of Gross Domestic Product peaked above two per cent in 2021 but has since slipped below one percent, reflecting broader macroeconomic challenges.
These included high financing costs, regulatory complexity, and infrastructure deficits, particularly in power and transport, Mr Cudjoe said.
Mr Cudjoe however cautioned that legal reform alone would not fix the investment climate, and that the country must address systemic issues including macroeconomic volatility, logistics bottlenecks, and the cost of capital, “Otherwise, we risk opening the gates without paving the road.”
He said the Ghana Union of Traders Associations (GUTA), which had previously clashed with the Nigerian Union of Traders Associations, Ghana (NUTAG) over enforcement of reserved-sector rules, was yet to issue a formal response.
However, past protests, especially in mobile-phone and retail markets, had suggested that any perceived erosion of local safeguards could provoke swift opposition, he said.
Mr Cudjoe said though GUTA’s concerns were valid, the solution was not about exclusion, but also regulation and the need for robust aftercare services from GIPC, to ensure that new entrants contributed to skills development and technology transfer.
He explained that the GIPC Act currently sets equity thresholds of US$200,000 for joint ventures with at least 10 per cent Ghanaian ownership and US$500,000 for wholly foreign-owned firms.
These provisions were expected to remain intact, alongside incentives for technology transfer and strategic-sector investment and asserted that sectoral alignment would be key.
Mr Cudjoe further noted that Ghana had a vast agribusiness potential, where cocoa contributed 2.5 per cent of GDP and one-quarter of export earnings, supporting over 800,000 smallholder farmers.
Again, cassava yields exceeded 19 million tonnes annually, while emerging soybean cultivation supported feed-meal and oil-extraction industries.
In mining, gold accounted for over 90 per cent of sector GDP, and offshore oilfields like Jubilee and Sankofa continued to attract upstream investment.
Mr Cudjoe emphasised that the country must channel capital into areas that deepened supply chains and spread benefits nationwide; meaning prioritising roads, renewable energy, and public housing, not just deregulating trading.
He said as the nation moved to amend the GIPC Act, IMANI Ghana and other stakeholders sought for a balanced approach that preserved Ghanaian enterprises, while embracing global opportunity.
If implemented with care, the removal of the one-million-dollar threshold could mark the beginning of a more diversified, inclusive era of foreign investment.
GNA
Edited by Christabel Addo