Here are 4 Important Points to Ponder on Ghana’s Investment Climate:
Openness to Foreign Investment
- Attracting foreign direct investment continues to be a priority for the government of Ghana. The Ghana Investment Advisory Council (GIAC), which was established with the help of the World Bank, helps shape government policy aimed at creating an enabling investment environment. The GIAC consists of multinational and local companies and institutional observers including the International Monetary Fund, the World Bank and the United Nations Development Program.
Conversion and Transfer Policies
- Ghana operates a free-floating exchange rate regime. Ghana’s local currency, the Ghana cedi, can be exchanged for dollars and major European currencies. Investors may convert and transfer funds associated with investments provided there is documentation of how the funds were acquired. For details, consult the GIPC Act and the Foreign Exchange Act. Ghana’s investment laws guarantee that investors can transfer the following in convertible currency out of Ghana: dividends or net profits attributable to an investment; loan service payments where a foreign loan has been obtained; fees and charges in respect to technology transfer agreements registered under the GIPC law; and the remittance of proceeds from the sale or liquidation of the enterprise or any interest attributable to the investment.
Performance Requirements and Incentives
- Ghana is in compliance with WTO Trade-Related Investment Measures (TRIMS) notification. Foreign investors are not required by law to have local partners except in the fishing, insurance, and mining industries. In the tuna-fishing industry, non-Ghanaians may own a maximum of seventy-five percent of the interest in a tuna-fishing vessel. In the insurance sector, a non-Ghanaian cannot own more than sixty percent of an insurance company. There is compulsory local participation in the extractive sector: by law, the Government of Ghana acquires an automatic ten percent of all interests in mining and oil and gas ventures (a carried interest, at no cost to the government). The 2006 Minerals and Mining law, however, allow the government of Ghana to negotiate any other form of participation.
- Ghana’s legal system is based on British common law. Investors should note that the acquisition of real property (land) is governed by both statutory and customary law. The judiciary comprises both the lower courts and the superior courts. The superior courts are the Supreme Court, the Court of Appeal, and the High Court. Lawsuits are permitted and usually begin in the High Court. There is a history of government intervention in the court system, although somewhat less so in commercial matters. The courts have, when the circumstances require, entered judgment against the government. However, the courts have been slow in disposing of cases and at times face challenges in enforcing decisions, largely due to resource constraints and institutional inefficiencies. There is interest in alternative dispute resolution, especially as it applies to commercial cases. Several lawyers are providing arbitration and/or conciliation services. Arbitration decisions are enforceable provided they are registered in the courts. The government has established “fast-track” courts to expedite action on some cases. The “fast track” courts, which are automated (computerized) divisions of the High Court of Judicature, were intended to try cases to conclusion within six months.