The Ghana Investment Promotion Centre (GIPC), is considering a review of its methodology in calculating foreign direct investments into the country.
According to the Chief Executive Officer (CEO) of the GIPC, Yofi Grant, the proposed new methodology is based on recommendations by the United Nations Conference for Trade and Development (UNCTAD).
Speaking to the press on the sidelines of the launch of the Centre’s 19th Edition of the Ghana Club 100, Grant quipped the new methodology when agreed to, will include the recognition of projects by businesses, particularly by foreign companies as part of the country’s foreign direct investment (FDI).
The inclusion of projects by businesses as part of foreign direct investment (FDI) is a common practice around the world and is particularly practiced in developed countries.
Traditionally, the GIPC records cash and equipment brought into the country by foreign companies as foreign direct investment (FDI).
GIPC is reconsidering the metrics it uses in measuring FDI, most countries include projects being undertaken by businesses as part of their FDI, even those with government participation but we don’t.
FDI inflows to Ghana increased by 39% to $2.6 billion for the year 2021, this placed Ghana 2nd in West Africa, and 7th in Africa in terms of FDI attraction.
The rise in Ghana’s FDI flows was attributed to major projects in its extractive industries, which included; the construction of an $850 million gold mining facility by Newmont Corp, and the construction of a cement factory by Ciment d’Afrique (CIMAF) for $436 million.
The increase in FDI flows reflects the findings of the Deloitte 2022 Africa Investment Attractiveness Index, which placed Ghana as the second most appealing destination for investments in Africa based on the comments of nearly 200 CEOs.
In recent years, the government through the GIPC has made FDI attraction a priority by improving investment attraction strategy to a more proactive one.
It has also spurred private sector investment through the Ghana Covid 19 Alleviation and Revitalization of Enterprises (CARES) program – a 100bn Ghana Cedis economic response program, aimed at supporting the private sector in targeted sectors, to accelerate growth and stabilize the Ghanaian economy.
In addition to encouraging private sector investments, the government has been working to eliminate regulatory discrepancies among several state agencies that create unnecessary barriers to doing business.
The GIPC for instance, has digitized its registration procedure, making it considerably quicker and more flexible for investors to register and apply for exemptions under the GIPC Act (Act 865).