Take advantage of opportunities in Ghana "GIPC CEO courts investors"
THE Chief Executive Officer (CEO) of the Ghana Investment Promotion Centre (GIPC), Yofi Grant, has courted German and other investors across the world to look at Ghana and to do business in view of the opportunities that exist for growth and expansion.
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He said Ghana, which had a conducive investment climate was a good place to harness the 1.4 billion African market, which was expected to increase to 2.6 billion people, a quarter of the world’s population, by 2035.
“If you are not on the continent doing business, you would have missed out on the next opportunity of growth and getting the world back to where it was during the pre-COVID times,” he said.
Ghana’s readiness
In a presentation on Ghana’s Path to Economic Recovery at an Economic Outlook Forum organised by the Ghanaian-German Economic Association (GGEA) in Accra, Mr Grant said in the case of Ghana, the country was ready and open for business as there were opportunities, openness and optimism to keep investors focused.
“And as we are looking forward to confronting the problems that are with us today, we are also indeed very optimistic that we will achieve growth and re-assert ourselves as a growing economy,” he emphasised.
The virtual event was on the theme: “Ghana’s Economic Outlook for 2023”, and was attended by the German Ambassador to Ghana, Daniel Krull.
Economic recovery
Mr Grant indicated that Ghana was on the path to economic recovery in view of the measures and steps being taken by the government to put it back on track.
Among other things, he cited the government and International Monetary Fund (IMF) engagement as an example.
He said on December 12, last year, the government and the IMF reached a staff-level agreement on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility of about $3 billion.
The three-year programme, Mr Grant said, was anchored on the government’s post-COVID-19 Programme for Economic Growth (PC-PEG) aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable.
According to him, there had significant progress towards presenting Ghana’s programme to the IMF and expected that there should be approval in the coming months to enable the country to engage in the programme actively.
Some of the steps being taken going forward, he said, were to ensure the reduction in total public debt to Gross Domestic Product (GDP) and also to improve the revenue collection efforts.
He said because energy was critical for the economy going forward, there was the need to increase the stock of renewable-sustainable energy by at least 35 per cent this year and also ensure reforms in the sector.
Others, he added, included a 30 per cent cut in discretionary expenditure at the MMDAs, strengthening the fiscals and forex commitments, which included flushing out persons on the black market.
Moreover, Mr Grant said there was also the gold purchase programme by the Bank of Ghana to boost its reserves to strengthen the cedi.
Others were the reduction of dependence on imported goods and digital transformation to improve the efficiency of government services.
Prior COVID-19
The GIPC CEO noted that prior to the COVID-19 pandemic, the country grew at an average rate of seven per cent between 2017 to 2019 before seeing a sharp contraction due to the pandemic, which led to a GDP growth rate of 0.7 per cent, 5.4 per cent and 2.9 per cent in 2020, 2021 and the third quarter of 2022.
He said that clearly showed that before COVID-19 and the current Russia-Ukraine, the country’s economy was trending positively in almost all directions.
To arrest what had happened, he said the government came up with a plan known as the Ghana Cares plan, COVID-19 alleviation and revitalisation of enterprises support programme, which was supposed to run from 2020 to 2023.
He said the first stage, which was the stabilisation phase, ran from July 2020 to December 2020 and that it was designed to bring stability to the rapid decline in the economy.
He said even though the country had low mortality and low infection rates, the impact of the pandemic on the economy was severe and to respond to that was the medium-term revitalisation phase, which was to take place from 2021 to 2023.
“And I dare say that just when we thought we were recovering, the conflict in Russia and Ukraine brought about a major reversal of some of the achievements that we have had,” he said.
He said the COVID-19 Alleviation Programme sought to bring about stability in the economy, ensure food security, support businesses and workers, strengthen the health system and the passage of legislation to facilitate quick economic recovery.
Certain specific areas, he said, were highlighted for areas of investment and development.
Programme
Mr Grant said the entire programme had an envelope of GH¢100 billion of which the government was to provide 30 per cent of GH¢30 billion and the private sector, 70 per cent of GH¢70 billion to vitalise enterprises and investment to grow the economy.
During a presentation on “Dealing with shrinking credit facilities and high-interest rates”, the Head of the German Desk at Access Bank, Max Ernst Heinrich, said the IMF deal would bring some credibility and confidence to investors who left the country.
In the short term, he said, inflation would come down, exchange rate would stabilise as would the interest rate.
What companies needed to be aware of was to honour their obligations to existing facilities to strengthen their businesses and ensure that their returns and margins of products sold were higher than the cost.
Mr Heinrich said it was important that they optimised their cost structure, especially with rising prices of electricity, among others.
The Senior Manager of the Tax Unit of accounting and advisory firm KPMG, Gordon Dardey, said there was no better time than now for companies to begin preparing for the future.
Among other things, he said, they should quickly assess their organisational structures to ensure alignment with the evolving commercial, operational and financial operating models
Mr Dardey added that companies should engage in learning and development and give employees reasons to believe in the future of the company so as to contribute to the company’s success through a difficult period.
For his part, Mr Krull said he knew about sectors that were still booming in the country despite the economic challenges.
