GIPC CEO Defends Removal of Capital Requirement to Boost Foreign Investment in Ghana

Yofi Grant, Chief Executive of the Ghana Investment Promotion Centre (GIPC), has staunchly defended the recent decision to abolish the capital requirement for foreign businesses, citing its potential to enhance Ghana’s competitiveness and attract more investors.

The move, which eliminates the mandatory capital investment of $200,000 for joint ventures and $1 million for retail businesses by foreigners under Section 28 of the GIPC Act, aims to foster a more inviting business environment.

Addressing stakeholders at the second Ghana EU Business Forum in Accra, Grant clarified misconceptions surrounding the capital requirement, noting that it was often misunderstood as a deposit rather than an indicative threshold.

“The capital requirement has been perceived as a barrier, particularly for SMEs and SMIs engaging in joint ventures. This move is intended to alleviate such constraints and encourage broader participation in Ghana’s economy,” Grant explained.

He underscored that foreign investors typically bring substantial capital investments exceeding the previous thresholds, making the requirement less relevant as a regulatory hurdle.

However, Grant acknowledged concerns from local trading groups who view the decision as potentially detrimental to local businesses, expressing sympathy for SMEs lacking comparable financial capacity in joint ventures.

The decision has sparked debate within Ghana’s trading community, with some stakeholders criticizing it as regressive and favouring foreign interests over local enterprises, particularly in retail sectors.

Grant’s defence positions the GIPC’s policy shift as a strategic move to stimulate economic growth through increased foreign investment while addressing the complexities of local economic dynamics and competitiveness.

Source:newsghana.com.gh