Investors Still Prefer Ghana

The American Chamber of Commerce (AMCHAM) Ghana says Ghana will continue to be an attractive destination for US investments.

In an interview with Graphic Business, Mr Philippe Ayivor, President of AMCHAM, Ghana mentioned that good governance, the rule of law, particularly, the respect of the sanctity of contracts, political stability and the safe environment in the country were some of the factors working in the country’s favour.

According to statistics from the Ghana Investment Promotion Centre (GIPC), since 2009 there has been an increase in the number and value of US investments in Ghana.

For instance, in 2009 there were 12 projects registered in the country with a total value of US$6.976 million, increasing to US$108.304 million from 20 projects at the close of December 2011.

Among the major investors and the sectors in which they have invested in are: Kosmos and Halliburton in the oil and gas industry; Coca-Cola in the beverage industry; Newmont in the mining sector; General Electric power generation; Cummins Ghana Limited in heavy duty generators; Citi Bank Ghana in the financial services; Google Ghana, IBM and CSC Computer Systems Ghana, in the ICT sector.

For the sectorial breakdown, there were 20 companies in the agricultural sector with an investment value of US$59.2 million. In the building and construction industry, there were 14 American projects with a total estimated value of US$59.3M while in the area of manufacturing there were 29 projects with a value of more than US$2 billion. The services sector had 96 projects with a value of US$244.1 million while the tourism sector had 30 projects with a value of US$24.1M.

In addition, in the first quarter of this year, The United States of America topped the list of investors in the country with an FDI value of US$407.21 million while China remained the top source of FDIs in terms of the number of projects.

The Ghana Investment Promotion Centre (GIPC) recorded 95 new investment projects in the economy at an estimated value of GhC 2.01 billion (US$1.18 billion) for the first quarter of the year.

The amount represents 67.98 per cent of the figure recorded in the same period last year.

Of the projects, the Foreign Direct Investment (FDI) component amounted to US$979.85 million which is more than twice the figure for the same period last year. The total initial capital transfers for the quarter amounted to $43.27million; a move that indicates a firm assurance of the investors entering the country.

The President of the Chamber emphasised the need to continue to improve the economic and social environment of the country for it to continue to be an attractive destination for investments.

Mr Ayivor said ‘We should continue to build infrastructure especially in the power, water and transportation sectors, ensure macroeconomic stability, rapidly build human capability and continue to improve the ease of doing business in order to be an attractive destination for US capital’

He stressed the need for the country to benchmark itself with the rest of the world to enable it to continue to attract more foreign investors.

He emphasised that “capital moves to anywhere around the world where it can be protected, easily invested and get the best return for shareholders. We should, therefore, not limit our comparisons to the rest of the continent but to the rest of the world, especially to other fast emerging markets.”

To attract more US investors into Ghana, Mr Ayivor said AMCHAM was working closely with the US Chamber of Commerce, the US Embassy in Ghana and US government and investment agencies to highlight the benefits of investing in the country.

AMCHAM is providing information about opportunities in Ghana to allow investors to make an informed decisions. The chamber is interested in seeing more US businesses take advantage of the opportunities and the improving business climate in the country.

Mr Ayivor said “Americans believe that the growth markets now are the emerging markets in Asia followed by those in Africa with Ghana being mentioned among the few with very positive growth rates and a conducive business environment”, he said.

The chamber also provides a platform for American companies to meet with local Ghanaian businesses to explore opportunities to form joint ventures.

However, he said, the chamber was concerned about some of the major challenges within the economy, a situation which he said makes it difficult for investors to do business in the country.

He cited the currency depreciation which made it difficult for companies with an imported raw material component to plan.

“Any plans you make are derailed by the changes in the currency and when your costs increase, you are forced to pass those on to your consumers and that impact on the growth of your business negatively’

He also mentioned access to capital and said the interest rates regime in the country was an impediment to raising capital for business growth.

It is difficult for companies to borrow internally at an average rate of about 20 per cent or more.

Mr Ayivor said that on the balance sheet, Ghana still remained a conducive place to do business and this was evident by the increasing number of American investors in the country.

Source: Daily Graphic