Ghana’s first president, Dr Kwame Nkrumah, had a vision for rapid industrialization that would open-up the region for trade. But many years later we are still talking about massive gaps in power and infrastructure across the region. What role is the GIPC playing in helping to fill these critical gaps?
One of the first things to note, when referencing the historical viewpoint of our founding fathers, was their understanding of how the private sector supports development, and therefore, the need to be very clear in those areas of development that will support economic growth. Clearly, infrastructure was fundamental. You were dealing with an Africa that lacked adequate energy resources, well-planned roads, airports and port facilities to match the interest that we are seeing almost 60 years later, in 2014.
Like many African countries, Ghana has begun the process of ensuring that investment promotion focuses on things that are critical for development. Clearly, infrastructure is at the top of the list. There is clarity of mind in policy perspective that by 2015, we need to have at a minimum of 5,000 megawatts of electricity generation.
Our understanding of what is required to become an upper-middle-income country is important. For me, that lies in our ability to be efficient in our engagement with the investing community, to facilitate their understanding of the development requirements associated with the investments they are making, and to support them to understand the evolving legal and regulatory framework so they can fit their business plans into that agenda.
Many businesses understand the sustainability behind the national development plan. Those are the things that we are seeking to do as an investment promotion centre. We engage with strategic investors because we are talking about large scale infrastructure development projects. We engage investors that understand the need for domestic participation, and apply that in our socio-economic context.
As an investment promotion centre, we are able to liaise with other institutions, like ministries. It’s about presenting the right image of Ghana, and ensuring that the experience the investor has translates into tangible results. That is where our work really lies: creating costumer-friendly interventions that help them to understand how the investment opportunities translate into commercial benefits for them.
The speed with which we are able to support them through the licencing and regulatory requirements are just as important. You are engaging with investment promotion officials who understand business plans; you are having a conversation with someone who can hold your hand through the process.
We have staff who understand the agriculture, tourism and energy sectors. We are taking a long term strategic view of where the country wants to be, and informing that in our own internal systems and processes. It is much faster, and it also translates into results.
Ghana is now a lower-middle-income country. How is this reflected in the type of financing models you are you are expecting investors to put forward?
Many of the investors we are engaging now are strategic investors. That means they are looking to invest around 50 million USD. However, it is more than the financial number. It is interesting for us to engage with smaller groups of exceptional investors with vast experience. It is a focus on partnerships.
There is also an inclination towards public-private partnerships. Ghana has been successful in evolving clarity around the roadmap for executing PPPS. As an investment promotion centre, we ensure that we can hold the hand of the investor interested in that financial model, and we work closely with them and the Ministry of Finance.
We have been in lower-middle-income status, we are progressing to upper-middle-income, and therefore we recognize the need for more sophistication around the types of business models that will suit the investing community.
One of the other unique things is the vast experience of the Ghanaian diaspora that are coming back home. There are a lot of different financial models working well for the private sector. As the President said, the private sector really needs to be at the forefront of our development agenda. It’s our goal to ensure that we facilitate as much as possible their intervention. We have also been acting as a liaison between policymakers and the private sector. This has helped to create efficiencies that in the long term will support development.
The President said we need strategic investors and not cowboy investors. That is why I think our attention on bringing together the international and Ghanaian business community is important. We try to showcase the best of the best in our business community through our Ghana Club 100 event every year, where we recognize innovation and entrepreneurship in Ghana. We showcase them, and share this with the international investment community so they recognize the opportunities to partner.
There are people with incredible experience in the local context and excellent reputations that can engage with their international counterparts. You are seeing blocks of business delegations coming to meet the Ghanaian business community. That is exciting for us. There is a great deal of reasons to be optimistic. There is no question about the macroeconomic challenges the country has faced. The proof of how we positions ourselves as a country is the political stability in the region, and the ability to identify specific investment opportunities, packing them and presenting them to the international business community.
Tullow Oil started the Invest in Africa group, which intends to help develop local businesses as partners. GIPC is a local partner of this initiative. Is this scheme representative of what you are looking for from investors? What impact is Invest in Africa having on the ground in terms of building the capacity of local businesses?
That is the direction where we want to go. If you look at the oil and gas sector and the experience of other countries, it informs the quality of what Ghana has put forward in terms of legislation. The intent is to ensure inclusiveness, and transparency in how resources are ploughed back into the development agenda, and also ensuring there is profitability for the investors. That is fundamental for us. We ensure the business community is comfortable about the quality of standards. We want to be able to partner with institutions that are showcasing Ghana. It is having a profound impact on the way the business community is looking at developing its financial models. They realize it is not necessarily second nature to assume that those resources will not be available in this country. There is a more detailed due diligence that happens. Ghana is a country in a sub region with a strong reputation for human resource skillsets. Having decades of experience in mining, there is expertise to tap into. National and international companies look at investment opportunities, and how to maximize use of local resources and expertise.
You have won personal awards for youth development. Ghana has a young population, like much of the continent. Do you see part of your role here is to ensure young people have the opportunity to develop their skills and find meaningful employment, so this demographic dividend is not wasted?
Our president has been quite clear that he has three top items of focus: the first is jobs, the second is jobs, and the third is jobs. He wants to make sure that investments translate into economic activities that improve the livelihoods of people. It is not just about super skilled corporate workers, but also mid-level managers, vocational training institutes.
Ghana is known for the quality of the cocoa it is producing. We need to be recognized for producing the best chocolate! Jobs have to be made available as a result of investments. Some must go to the use of local resources. Clearly, there is a broader agenda to ensure that the investor gets value for money, but at the same time, as a country we are able to achieve economic goals through employment. It is a balance the government and the public sector are looking for.
We are promoting more interaction and communication between academic institutions and the private sector so they bring forward skillsets that are relevant for long term strategic investments. That way, we ensure the right skillset for specific investments. I remain confident about the ability to evolve.
Some 60% of our population is involved in agriculture, so agro-processing would fit into the development agenda. It is not enough to produce crops; we want to process them in this country. It has been exciting to see the Ghanaian business community engage with the international business community. There is no question that this trend will continue.
The size of the Ghanaian diaspora in the UK is approximately 500,000. Could you highlight GPIC’s activities or programmes specifically aimed at encouraging the diaspora to invest in Ghana?
A lot of our work will be based on the direction we get from the Ministry of Foreign Affairs. They are on the ground in the country, engaging regularly through the trade unit. They will give us some indications on the areas of interest and the feedback they are getting in the UK. We would like to look at the history of investment, and introduce new opportunities as well. There have been investment forums, and it’s our opportunity to showcase some of the interventions that are important for us.
Ghana has been strong in showcasing its portfolio of investments. We have a geographical advantage in access to the other West African countries within the sub region. All the conditions are right for investing. The Ghanaian diaspora will continue to play an important role in interacting with the UK business community. The UK interest is something we will support in every way possible.
In recent years, there have been major British investment projects, such as the impending Lonrho Freeport and Tullow’s oil finds in the Jubilee fields. These have historic, transformational potential. Given the scale of British investment in Ghana at present, is this a ‘golden age’ for British-Ghana relations, as the former Ambassador Peter Jones said last year?
Yes, absolutely. He did tremendous work creating a lot of interest around investing in Ghana. We would like to see more balance in the import-export ratio between the countries. There is no question in our minds that we are going to build on the experiences of interactions between the two business communities.
The Global African Investment Summit is taking place London in October. Ghana will be represented alongside Togo, Uganda, Rwanda and Tanzania. What do you say to investors about the enabling environment here? Why should they put their money in Ghana and not elsewhere?
It is obvious. The first thing any investor will ask about is political stability. Ghana doesn’t have any peers when it comes to political stability. We have demonstrated the maturity of our democratic processes. That doesn’t mean they are perfect, but none are. They are looking at political stability that gives them comfort. They also look for a robust regulatory environment. When you look at the evolution of the legal environment, the strength of our parliament, the consumer protection agencies, that has had inputs in our economic development and gives confidence to investors.
If you look at us vis-à-vis other countries in the region, the quality in telecommunications is not a challenge, human resource skillsets are developed, and those things encourage investors to come. I would say to the investor community that this is a place where you have every opportunity to access the best investments the continent has to offer. We have all of the things that are important to them, and also an investment promotion centre that’s slogan is ‘we are your prosperity partner’. We want them to be prosper and profitable, but also to understand our development needs. That is why we are one of the preferred destinations for FDI on the continent.
The main focus of GIPC is to search for quality investment. We try to get to know the people who really matter. You expect knowledge and expertise from foreign investors but nobody understands the country as well as local businessmen. What do you think Ghana has to teach foreign investors in the business arena?
The vibrancy and openness of our media landscape would be a good reflection of Ghana and Ghanaians at this stage. The discourse is broad, it’s very liberal, and it speaks volumes for what the international business community can expect.
You will find Ghanaians who are extremely astute. You go into our communities and some of the toughest questions come from communities, because they understand and are living the next development requirements. People are coming from that background and are developing an entrepreneurial spirit to address certain social and development requirements.
If I have to say anything of about what Ghana can teach it is the experience of the new Africa, and the reality that this is really where all the opportunities lie. Ghana is a great place to have those experiences in a safe environment where you can develop a roadmap that is truly Ghanaian.
Ghana will be able to teach the business community what it really means to do business responsibly on this continent. That is a fantastic story to tell.
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