Interview: Adam Afriyie
Which economic sectors in Ghana present the greatest potential for UK investors?
ADAM AFRIYIE: There are great opportunities for UK investors in Ghana, which is an enormously rich country, not only in terms of the natural resources it possesses but in its people, who are very entrepreneurial. The key sectors for overseas investors in Ghana are still power and utilities. The current focus is on equipment, vehicles, chemicals and mining products, and electrical and mechanical supplies. That will not change, but UK investors are keen to explore wider opportunities. The UK has strong market expertise in oil and gas, construction, power, health care, agri-business, mining and financial services. There is potential for partnership across all of these sectors. As Ghana’s markets continue to grow, the focus will be on innovation and quality at competitive prices.
How can the UK government encourage more private sector investment from the UK?
AFRIYIE: The UK is very much open for business, and we are aiming to increase the number of UK companies exporting globally by 100,000 by 2020. Ghana is a key market with strong pre-existing links to the UK. English is the lingua franca, we share a similar legal system, good bilateral relations, and we are home to a large and increasing Ghanaian diaspora. The goodwill to trade and invest is there, and we have introduced a £20m package funded by the Department for International Trade (DIT) to assist first-time exporters across developing economies. The DIT was involved in opening the new UK-Ghana Chamber of Commerce in September 2016, and the UK backs Invest Africa, which provides information about investment opportunities and supports the British Council for Africa.
Perhaps the most important UK government catalyst for investment in Ghana is the Exporting is GREAT initiative. This granular initiative works with the public and private sector to support UK businesses in selling their goods and services overseas. The website contains opportunities worth hundreds of millions of pounds organised by sector and market, with around 1000 new opportunities uploaded each month.
What are the biggest challenges that UK investors face when investing in Ghana?
AFRIYIE: One of the barriers to investment is macroeconomic instability, including infrastructure deficits in the energy market, which prevent firms from conducting business, as well as currency fluctuation and foreign exchange restrictions, which make it difficult for businesses to plan ahead. Fortunately, the cedi has stabilised over the last year; however the Association of Ghana Industries’ most recent “Business Barometer” cited the continued unreliable power supply as a major impediment to business confidence.
Increased deregulation of state-owned enterprises and private sector participation in key areas would open the market up to competition and improve efficiency, which is currently a challenge. This is being addressed through, for example, the launch of the 2015 Ghana National Single Window to ease Customs clearance, and in improvements in guarantees of property ownership. The IMF’s extended credit facility and its corresponding measures barring sovereign debt guarantees are a current barrier to large UK investment projects, but are time-limited.
Perhaps the biggest challenge is opaque business practices. For UK businesses to invest in Ghana, they need to be able to rely on licensing and regulatory institutions and bodies to operate in a fair and efficient manner in providing permits. Ghana needs reforms in this area to ensure it remains competitive within emerging and developing markets.
I think that if the major challenges facing investors are resolved, we will see a substantial boost in bilateral trade over the coming years, in addition to a stronger, more balanced trading relationship.
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