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The Association of Ghana Industries (AGI) has urged the government to tread cautiously with its decision to scrap the minimum capital requirement for foreign investors, warning that such a move could have unintended consequences for indigenous businesses.
It explained that while the President’s intention to remove the requirement is aimed at attracting more foreign investment, it could expose the Ghanaian business environment to unhealthy competition and weaken the capacity of local enterprises.
“We have heard far away in Japan that the President has called to remove the minimum capital requirements. Whilst we do appreciate the President’s concern to ensure that a lot of opportunities are created for foreigners to come and do business in Ghana, we believe that there’s a reason why that policy is in place,” the Greater Accra Regional Chairman of AGI, Tsonam Akpeloo, told the media at the Czech–Ghana Business Cooperation Seminar in Accra August 2.
The event was organised by SEDA Africa Group Ltd to provide a platform for Ghanaian and Czech businesses to share ideas and explore ways of strengthening strategic partnerships through technology transfer, knowledge exchange and other forms of collaboration.President John Dramani Mahama at the Ninth Tokyo International Conference on African Development (TICAD-9) in Yokohama, announced that the government would remove the minimum capital requirements for foreign investors under a revised Ghana Investment Promotion Centre (GIPC) Act.
The proposed change, he said, would allow any investor, regardless of the size of their capital, to establish a business in Ghana.
Currently, the law requires foreign investors to meet a minimum equity contribution before setting up businesses, with higher thresholds for wholly foreign-owned enterprises and trading companies.
Mr Akpeloo cautioned that eliminating the requirement could allow foreign traders, even those with minimal capacity, to flood the Ghanaian retail market, directly competing with local traders in sectors reserved for citizens.
“Imagine you take off these capital requirements and the next day, someone from Japan or Nigeria comes to Ghana and decides to sell waakye on our streets. That is not what the President intends, but it is one of the unintended consequences of such a policy,” he warned.
He stressed the need to strike a balance between honouring ECOWAS protocols, which promoted free trade and safeguarding the interests of Ghanaian citizens.
“Citizenship is very important. It must come with benefits. I would like to go to East Legon to buy roasted plantain from a Ghanaian, I would like to buy waakye from a Ghanaian and take a taxi driven by a Ghanaian. These are some of the things we must protect,” he emphasised.
Mr Akpeloo also advocated for the introduction of an equity law that would compel foreign companies to partner with local businesses in order to qualify for government incentives.
He cited Nigeria’s example in the 1970s, where an equity regime helped nurture indigenous businesses that later grew into continental giants.
He further urged the government to support industry by lowering the cost of capital, providing tax rebates and improving access to financing to make initiatives such as the proposed 24-hour economy more viable.
On the Ghana–Czech business relationship, he welcomed Czech interest in agriculture, beverages, and construction.
He noted that joint ventures in these sectors could reduce Ghana’s heavy reliance on imported raw materials and strengthen the local economy.
“Our view is that some of these partnerships will help us create the needed raw materials locally, strengthen the cedi, and expand the economy,” he said.
The Chief Executive Officer and Co-Founder of SEDA Africa Group Ltd, Martin Habart, described the seminar as an important step in building closer ties between Ghana and the Czech Republic.
He noted that the Czech Republic, one of the most industrialised countries in Europe, had a strong base of manufacturers in agricultural machinery, innovative technologies and industrial solutions.
He identified agriculture as a key area of opportunity, stressing that Ghana, with its vast arable land and abundance of raw materials, could become a hub for West Africa in producing value-added agricultural products for both local consumption and export.
Mr Habart also pointed to water infrastructure as another critical sector for collaboration.
Czech companies, he explained, had proven expertise in water treatment, exploration and distribution networks, which could support projects for drinking water supply as well as irrigation in farming.
