The Chief Executive Officer of the Ghana Investment Promotion Centre, GIPC, Yofi Grant, says the agency is revising its incentive packages to encourage Foreign Direct Investments into the country post COVID-19.
He says this will include offering incentives to foreign investors who will partner Ghanaians to build local capacity.
While admitting that the novel coronavirus pandemic has impacted investments flow, he said the African continent will be a focus for investors after the pandemic due to its vast resources.
Speaking on Citi Breakfast Daily on Citi TV, Mr. Yofi Grant said ongoing investments in infrastructure such as transport and housing are critical for the country.
“At GIPC, one of our recommendations is to look at the incentive regime differently. Unlike before where we give incentives to certain sectors, we are now looking at giving incentives to foreign direct investments that partners with Ghanaians. I think it is good enough to also enable Ghanaians to get to that level.”
“We are also looking at major reforms to reduce some of the barriers to entry to even make us more attractive. Government’s view is that, going forward, we should even further strengthen our infrastructure. That is why we have an aggressive rail program to enable faster and more efficient movement of goods and services. Then, we are looking at how we can work on the housing problem,” he said.
The GIPC boss says government may have to resort to other sources of revenue to make up for the drop in Foreign Direct investments, FDIs, caused by the pandemic.
According to him, the agency will not be able to meet its FDI target for the year under review.
“The United Nations Commission for Trade and Development (UNCTAD) has predicted that foreign direct investments will shrink up to about 40%, and if we don’t find any solution to COVID-19 in the second half of the year, it could even be more drastic. What that means is that, we were going to be challenged for foreign direct investments with some of the investors that we were looking at before in areas that we hadn’t predetermined and defined a closed deal.”
“Perhaps, we would have to look at other sources for revenue to develop. Government’s revenue port is taxes, borrowing and investments. Now one side is frozen. We can’t also forever be borrowing because we have to demonstrate that we can pay back and we can pay back by growth in the economy. That in itself has declined so going for more debt is going to be a challenge, unless we can go for it under terms we can manage. Taxes have also gone down because companies were not working. Investments are also looking different,” he added
The economic impact of the outbreak of the novel Coronavirus pandemic in the country saw flights as well as several high profile business events been cancelled, leading to loss of millions of dollars.
Also, the Foreign Direct Investments target for the country was affected. The target for this year still stands at $10 Billion dollars for the year 2020.
This remains unchanged from what was set for the year 2019.
Other government Interventions
In the wake of the COVID-19 pandemic, the Finance Minister announced that the cumulative effect of the pandemic will cost Ghana GHS9.505 billion.
Following this, government received three billion Ghana cedis credit and stimulus package from commercial banks, under the auspices of the Ghana Association of Bankers, with support from the Bank of Ghana, to revitalize Ghanaian industries particularly the pharmaceutical sector.
Additionally, government secured a one billion United States-dollar- Rapid Credit Facility from the International Monetary Fund, without any pre-condition. It would be used to help close the financial gap created by the COVID-19 pandemic
Also, government has allocated a GHS1.2 billion it secured from the Stabilization Fund under the Coronavirus Alleviation Programme, to support households and businesses.