If new laws are approved in a few weeks, foreign investors looking to do business in one of the world’s fastest-growing economies must give 30-80 percent of the jobs they create in Ghana to local workers, according to a report in Business Day Live.
Rather than hamper the free market, the legislation will get rid of the red tape and roll out the red carpet, said Mawuena Trebarh, Ghana’s top investment official, in the report.
Trebarh just returned from a trip to South Africa where she met with business officials in insurance, banking, mining, tourism, information technology and media. She plans to return soon for discussions with government agencies.
A Ghana-South Africa business forum is planned this year to cement ties and encourage more collaboration with African business partners, according to Business Day Live report.
About half Ghana’s exports go to South Africa. In 2010, there were 11 South African businesses in Ghana; now there are 40, the report says.
According to the proposed new laws, foreign investors will have to register with the Ghana Investment Promotion Center, which will co-ordinate their activities and ensure local participation as Ghana tries to grow local skills and create jobs by growing strategic industries and improving infrastructure, the report says.
Legislation will likely require 30 percent local participation in businesses for core workers, the report says, but in the energy sector, for example, local participation could go as high as 80 percent after five years. For management staff, 50 percent may have to be Ghanaian when a company starts operating.
“We can’t use the excuse there is not enough expertise in the country,” Trebarh was quoted as saying in the report.
Denying the registration process could hamper the free market, Trebarh said the aim is to expand the market rather than deny entry to foreign companies. It’s more about assisting foreign businesses throughout their ventures — guiding them through tax and customs requirements, providing connections and research and encouraging reinvestment, she said.
How is this different from South Africa’s black empowerment legislation and its goal of transforming the post-apartheid economy? In Ghana, the focus is on maximizing local expertise and building a professional skills base, said Trebarh.
Ghana’s corporate tax rate, which maxes out at 25 percent, is competitive with South Africa’s 40 percent corporate tax rate, according to Business Day Live.
As part of the program to improve the investment climate in Ghana, tax holidays will be given for up to 10 years, tax credits for small businesses, investment guarantees and custom duty exemptions on imported industrial plant, machinery and parts.