The government has set the right economic tone in its first 100 days in office to signal a positive investment climate for the country to attract the right Foreign Direct Investments (FDIs) to boost the economy, the Chief Executive Officer of the Ghana Investment Promotion Centre (GIPC), Mr Yofi Grant, has said.
He also noted that the policies outlined in the 2017 budget and the government’s economic policy had also boosted the confidence of the players in the private sector while creating the environment to spur growth and create jobs for the people.
Mr Grant said this in an interview with the Graphic Business in Accra last Tuesday, on what measures had been put in place by the government to attract more FDIs while encouraging local investors to up their game within the economy by leveraging the various policies outlined so far.
“The bold initiative by the Bank of Ghana to reduce the policy rate from 25.5 per cent to 23.5 per cent has increased confidence in the economy; we have seen the local currency strengthening in the last couple of weeks and it is expected to go down further,” he said.
According to him, a strong currency was a positive signal to investors, both local and foreign, and “we will leverage it to attract those who want to invest to come in to do so”.
He also mentioned that inflation was on a sharp decline, hovering around 13.2 per cent as of the end of February. In the same period last year, inflation was 18.5 per cent.
Mr Grant said the government was able to live up to its promise of cutting taxes in many instances and reducing others in other areas, all in an effort to free up some liquidity for the private sector.
Taxes such as the 17.5 per cent Value Added Tax (VAT) on financial services, domestic air tickets and imported medicines have been scrapped, while others such as the one per cent special import levy have been removed.
Also, the excise duty on petroleum, duty on imported spare parts, levies imposed on ‘kayayei’, levies imposed on religious institutions and the five per cent VAT on real estate have been abolished under the new government.
Meanwhile, the 17.5 per cent special petroleum tax rate has been reduced to 15 per cent, while the five per cent national electrification scheme levy has also been reduced to three per cent, and the five per cent public lighting levy has been reduced to two per cent.
Mr Grant said going forward, the government would be working on other tax incentives to improve what had been done in the budget.
For instance, there are positive signs to reduce the corporate tax from 25 per cent to 20 per cent, a move which corporate Ghana strongly anticipates to free up capital for them to expand.
Earlier in the month, Mr Grant told members of the American Chamber of Commerce (AMCHAM) Ghana in Accra that the government was considering giving 10-year tax breaks and citizenship to companies that relocated their headquarters to Ghana, among other things.
The GIPC boss said the signals sent so far were positive and gave the assurance that more were on the way.
Mr Grant said the government, with the involvement of the GIPC, was also considering major reforms to add to the existing incentives to make the investment climate more conducive.
“We at the GIPC are holding a lot of meetings with the embassies which are making enquiries about the policies of the government to create a better business climate for the private sector and investors,” he said.
He also noted that many investors were also enquiring about the ‘one district one factory’ initiative and “we are working around the clock to ensure that the private sector truly benefits from it”.
Mr Grant said the investment tours undertaken across many parts of the world so far pointed to revived interest in the economy and gave the assurance that the government would carry out its promises to ensure that the economy grow on the back of a vibrant private sector.