The Ghana Association of Restructuring and Insolvency Advisors, GARIA, is hopeful that the seventh Parliament to be inaugurated in January 2017, will facilitate the passage of the insolvency law to protect businesses from collapse.
It follows the inability of the current Parliament to pass the law.
GARIA, has expressed concerns over Ghana’s Companies Code describing it as obsolete.
According to the association, the law also fails to address modern challenges facing businesses.
“With regards to the modernization of the Companies’ Code, our laws are impertinent, the business world has changed dramatically, we now have e-commerce and globalization and we have to bring our laws to currency,” the President of GARIA, Felix Addo stated.
He added, “One of the key areas for the insolvency law was the absence of provisions to allow the companies withstand distress positions and to be able to turnaround.”
Mr.Felix Addo has warned of huge cuts in FDIs if Ghana fails to address the current insolvency regime.
He argued that the current practice where businesses are compelled to shut down over huge debts, downgrades the country’s reputation in attracting investments.
“It is important for Ghana to have a good regime so that in addition to all our democratic dividends, goodwill and political dividends, we will be able to attract FDIs to the country. We do attract quite a few because we have been fortunate, we have oil, we have gold, and we have all manner of natural resources. But we need to dramatically improve and increase the level of FDIs coming to Ghana,” Felix Addo asserted.
The concerns also followed a recent World Bank ranking on ease of doing business that placed Ghana at 114th position out of a total of 183 countries.
Mr. Addo is of the view this can be improved with an enhanced insolvency regime.
“We can improve this if the ease of doing business in this country is enhanced,” he suggested.
He made the remarks at GARIA’s end of year dinner in Accra.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana