The Chief Executive of the Ghana Investment Promotion Centre (GIPC), Yofi Grant, has strongly defended the Centre’s recent decision to eliminate the capital requirement for foreign businesses.

Under Section 28 of the GIPC Act, foreigners aiming for joint ventures are mandated to present a capital investment of $200,000. Individual foreigners intending to engage in retail business within Ghana must provide $1 million.

Speaking at the second Ghana EU Business Forum in Accra, he emphasised that the move aims to create a more competitive business environment, thereby attracting a greater number of investors to Ghana.

“Firstly, there was a conceptual misunderstanding because that money remains the company’s money; it is not deposited anywhere. According to our records and the research we have conducted, nearly every foreign investor entering this market ultimately brings more than $500, 000,” he explained.

He added that: “Therefore, this requirement should not have been an issue. However, it still poses a psychological barrier, especially when dealing with SMEs and SMIs in joint ventures. For instance, in a 50-50 joint venture, if the foreign partner must contribute at least $200,000, the local investor is also expected to match that amount. Unfortunately, many SMEs lack the necessary capital to invest in their businesses”.

Some local trading groups have described the review as retrogressive and spiteful on the face of Ghana’s trading community with some blaming the government for allowing Asians to take over their retail businesses.