Chief Executive Officer of Dalex Finance, Joe Jackson, has cautioned government against its plan to remove the capital threshold for foreign investors, warning that the move could undermine Ghanaian businesses.
Speaking in an interview, Mr. Jackson reacted to President John Dramani Mahama’s recent announcement in Tokyo that Ghana will eliminate the minimum capital requirement for foreign investors as part of proposed reforms to the Ghana Investment Promotion Centre (GIPC) Act.
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The President made the announcement during the Presidential Investment Forum on the sidelines of the 9th Tokyo International Conference on African Development (TICAD 9). He argued that the reform is intended to lower entry barriers for global investors, boost private sector growth, and accelerate job creation.
Currently, the GIPC Act, 2013 (Act 865) sets minimum capital thresholds for foreign investment: $200,000 for joint ventures, $500,000 for wholly foreign-owned businesses, and $1 million for trading enterprises.
Mr. Jackson, however, fears that removing these safeguards could disadvantage local entrepreneurs who already struggle to access affordable capital.
“We could have done a sector-by-sector approach. We could look at whether we want to do this for traders, or maybe limit it to investments in factories, plastics, and agro investments. But are we not making it even more difficult for Ghanaian businesses? These are real questions,” he argued.
He further raised concerns about capital flight, cautioning that relaxed rules on profit repatriation could worsen pressure on the economy.
“We should also look at repatriation. If I bring in just $5,000, how much am I going to be able to repatriate my earnings that go outside? If I bring in $5,000 and earn $10,000, can I take all the $10,000 out? Those are questions we have to ask,” he stressed.
While acknowledging that the policy is well-intentioned and could attract investment, Mr. Jackson insisted that its implementation must be carefully thought through. He urged Parliament to hold a thorough debate on the amendment and consider a sector-specific approach rather than a wholesale removal of thresholds.