The recent economic headwinds facing Ghana have cooled

one of the world’s hottest economies, but even as growth pulls back from the blistering pace seen in 2011-2012, its economy continues to hum along with a 5 per cent annual expansion fore-cast for 2014-2015, picking back up to 8 per cent by 2016, according to the IMF. This period has only served to illustrate the country’s mature economic policy, sta-bility and its solid long-term prospects.

These indicators help ex-plain the international com-munity’s optimistic posture

toward Ghana, whose high returns, strict regulatory and legal framework, and political stability make it the standout destination for investment in West Africa.

“It’s important to keep in mind that Ghana has a very promising future,” affirms Jon Benjamin, the British High Commissioner to Ghana. “It is stable politically. It is an open society. There is transparent, open democ-racy with the rule of law, a functioning judicial system, and clear laws for investors. Ghana has got all that.”

Mr Benjamin points to the UK’s centuries-old as-sociation with Ghana that not only encompasses close-knit ties at the government level, but the huge network of human relations that the two countries share, includ-ing the British-Ghanaian diaspora in the UK who number into the hundreds of thousands.

This dynamic relationship forms part of the bedrock of the UK’s engagement in Africa. Annual trade between the two nations has already surpassed £1 billion, help-ing propel the UK past the United States as the number one investor on the conti-nent, with $4.6 billion in FDI last year alone.

“Investment is not about today or tomorrow, it is long term,” Mr Benjamin explains. “In that sense, Ghana, way beyond its immediate eco-nomic challenges, has terrific prospects.”

As commonwealth mem-bers with a common history, ties between Ghana and the UK have flourished in recent years, as Ghana transitions to middle-income status, thanks in large part to the sound governance and economic policy that has brought in an influx of foreign capital.

“Practically in every sec-tor, there is investment from the UK, either FDI or joint ventures,” says Hanna Tetteh, Ghana’s Minister for Foreign Affairs and Regional Integra-tion. “Because of similarities in our legal and administra-tive systems, we understand each other’s systems, and that is a very important point for doing business.”

Leaders in both coun-tries share core values that have helped foster closer economic and political ties. “One of the key things is a commitment to human rights, rule of law and good governance,” adds Ms Tetteh. “We have a record of peace and stability in a competitive democracy, respect for rule of law, respect for property rights and the commitment

GHANATUESDAY, OCTOBER 21, 2014

a standout for investorsHigH returns, political stability and a

strict regulatory and legal framework

make gHana tHe standout destination

for investment in west africa

Project Team: Paula Mármol, Project Director; Martín Rodríguez-Villa, Editorial Director; Patrick Cooke, Editorial Director; and Gemma Gutiérrez, Regional Director

Distributed with The Daily Telegraph. Produced by PM Communications who take full responsibility for and are solely liable for the content.

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ghana’s extensive campaign of engagement with international investors is being highlighted in london this month at the global african investment summit

#Ghana

Ghanaian President John Mahama made an official visit to no. 10 downing street in June last year

The economic turbu-lence that Ghana has been experiencing

for the past several years has brought about some tough decisions that its leaders say will contribute to the country’s long-term stability and prosperity. Faced with an unsustainable current account balance, rising inflation and a depre-ciated currency, its leaders have not shied away from taking important steps to ensure that its impres-sive growth trajectory is not derailed by internal or external shocks. These measures include trimming spending to improve the government’s balance sheet, seeking assistance from the International Monetary Fund and encouraging in-vestment and private sec-tor development.

Ghana’s well-timed call

for IMF assistance this year has helped to restore some stability to the country’s economy, and to keep it on track. The fund’s figures show inflation dropping by roughly two percent-age points annually over the next two years, stead-ily declining to about 8 per cent by 2018 and remaining stable thereafter. Export growth, meanwhile, will leap to 12 per cent in 2015, the IMF forecasts, on its way to nearly 30 per cent the following year. Critically, Ghana’s current account deficit will drop by 4 per-centage points by 2015 and remain under 7 per cent in the years to come, as gov-ernment revenues expand to nearly one-quarter of GDP by 2019.

Another way the country has laid the groundwork for macroeconomic stability is

through the modernisation of its tax code. “Our man-date is to ensure efficient and effective mobilisation of revenue,” explains George Blankson, Commissioner General of the Ghana Rev-enue Authority (GRA). “Tax mobilisation and revenue mobilisation do not hinder growth and business, but rather promote develop-ment of the economy.”

The GRA has responded to Ghana’s current fiscal restrictions by streamlin-ing and simplifying the country’s tax system, with an eye toward facilitating business and investments. “When the tax system has a lot of loopholes for eva-sion and so on, it acts as a disincentive to those tax payers who want to com-ply,” Mr Blankson continues. “To make the tax system fair and efficient, so that

investors would see the incentives to comply, we apply the tax in a fair man-ner, and we also encourage transparency. It is only when you apply taxes on a level playing field and then use the revenue for infra-structural development to create skills and manpower required by investors that you will develop rapidly.”

Another response im-plemented by the GRA is to address the low adult population inclusion in the financial system by educating the population about tax du-ties. Mr Blankson says, “Only when people and business communities are brought in and educated about what tax laws are, and how they should comply, can we have voluntary compliance with tax laws.”

He observes: “Voluntary compliance with tax laws is not only cheaper for tax administration, but also more productive. When people don’t know what they are required to do, it is not fair even to apply sanctions to them.”

Mr Blankson further em-phasises that it is important for Ghana’s citizens to under-stand that taxes will be spent on the most effective way so

that it will make an impact on the population. He adds, “In designing our tax policies and procedures by which we mobilise revenue, we ensure that tax payers are not duly inconvenienced, and also en-sures that the tax structure itself promotes business.”

Mr Kweku Ricketts-Hagan, Deputy Minister of Trade and Industry, also recognises the fact that the Ghanaian tax system has been manipulated by “human interventions” in terms of individuals being involved in the collection of taxes. He reassures that they are “trying gradually to put all tax mobilisation on an elec-tronic platform and take out the corruption issues that we have in that area.”

Elaborating on the tax reform, Mr Ricketts-Hagan explains: “We have brought all the revenue agencies under one umbrella through

the GRA. If you bring all this together, people can benefit from synergies and econo-mies of scale.”

A simplified tax code has helped to provide investors the clarity they need to create long-term plans, the deputy minister argues. “As for our tax laws, we realised that we have not reviewed our tax laws for many years. Some of the taxes were ob-solete, limited, and unfair. We embarked on a very compre-hensive tax reform,” he says. “The business sector is very solid. It is the private sector that drives the economy.”

Mr Blankson agrees, adding, “In Ghana, especially in the last decade, private sector (leads) the growth process, and the modernisation of the economy. We have generally referred to the private sec-tor as the engine of growth for the economy.”

determined approach to macroeconomic stabilitygHana Has not sHied away from tougH decisions to ensure its impressive growtH trajectory is not derailed by internal and external sHocks

George Blankson, Commissioner General of the Ghana revenue authority

to build strong institutions that are independent of po-litical entities.”

Like many countries in Africa, Ghana hopes to use its recent progress to lever-age key investments in in-frastructure. “If Africa wants to be competitive, we need to build infrastructure,” explains Sir Samuel Essen Jonah, Executive Chairman of Jonah Capital. “How do you finance it? You can only finance it if government laws create the enabling environ-ment that let others see potential returns, and bring their money. The govern-ment on its own cannot build infrastructure. It can create incentives.”

Apart from placing con-fidence in Ghana benefiting from the African momen-tum, Sir Jonah, a business-man with vast experience,

brings up one more inter-esting element that not only pushes Ghana’s present, but also promises a bright future. Sir Jonah’s faith lies in the youth. “I take a lot of encouragement from the youth” he proclaims, “Young people are (the) country’s forward path to innovation and entrepreneurship. The youth gives one a sense of hope. They encourage you. Ghana will make it.”

Ghana’s extensive cam-paign of engagement with the international invest-

ment community will be on display in London’s Savoy Hotel at The Global African Investment Summit (TGAIS) on October 20-21. TGAIS will bring together inves-tors managing hundreds of billions of dollars with key leaders from Africa’s most dynamic economies, includ-ing Ghanaian President John Mahama and three other African heads of state.

“Ghana has begun the process of ensuring that investment promotion focuses on things that are

critical for development,” adds Mawuena Trebarh, CEO of the Ghana Invest-ment Promotion Centre. “Clearly, infrastructure is at the top of the list.”

To do this, Mrs Trebarh concedes, the country must do all it can to bring in in-vestments from all over the world.

“Ghana has been strong in showcasing its portfolio of investments,” she continues. “We have a geographical advantage in access to the other West African coun-tries within the sub-region. All the conditions are right for investing. UK interest is something we will support in every way possible.”

Moreover, Ghana as a partner promotes mutually beneficial relationships. Apart from looking into gaining experience, Ghana has on

offer a wealth of knowledge. Mrs Trebarh emphasises the unique attributes that Ghana can teach foreign investors in the business arena. She reflects on the fact that Ghanaian businessmen come from communities where some of the tough-est questions arise, which inspires the development of an entrepreneurial spirit to address certain social and development requirements.

She adds, “If I have to say anything about what Ghana can teach, it is the experi-ence of the new Africa and the reality that this is really where all the opportunities singularly lie, as far as this global economic dynamic is concerned. Ghana will be able to teach the investment community what it really means to do business re-sponsibly on this continent.”

“ghana has begun the process of ensuring investment promotion focuses on things that are critical for devel-opment” Mawuena trebarh, Ceo of the Ghana investment Promotion Centre

like many countries in africa, ghana hopes to use its recent progress to leverage key investments in infrastructure

the simplifed tax system has been designed to encourage business and investment

GHANA TUESDAY, OCTOBER 21, 20142

As Ghana passes through a period of belt tight-ening, its banks have

emerged with stronger bal-ance sheets, positioning them-selves to reach a growing retail and commercial customer base that is hungry for financial products. The country’s finan-cial services sector continues to expand access to capital and innovative new products, with financial and insurance activities growing at roughly twice the pace of the overall economy, at 12.1 per cent in 2013. As such, industry lead-ers have good reason to be optimistic about the future of banking and finance in Ghana.

Like many countries in the region, a relatively small share of Ghanaians currently have access to a bank account at a formal financial institution – just 30 per cent according to the most recent figures. Traditional commercial bank branches, meanwhile, number just five for every 100,000 inhabitants in Ghana.

While access to financial services has frequently been blamed as an impediment to greater inclusion in the country’s growing prosperity, the availability of cheap data-enabled handsets, as well as mobile banking and electronic banking services, is transform-

ing the banks’ abilities to tran-scend infrastructure gaps and reach millions of customers in the informal economy.

Rolling out these new ser-vices will require increased upfront capital expenditures for hardware, software and network infrastructure, but bank executives expect that these investments will be fully recovered through the new revenue streams that the services are expected to generate. These technology-enabled products and servic-es will be among the principal drivers of asset and revenue growths over the next sev-eral years.

“If you look at Ghana, we have rich natural resources. We have huge tracts of fertile land and fresh water bodies all over the place. We have enough to be able to produce,” says Stephen Kpordizh, Managing Director of Agricultural Develop-ment Bank (ADB). “But that

requires investments. That is where organisations like us come in handy.” ADB is one of two new listings ex-pected on the Ghana Stock Exchange planned for next year. The upcoming public listing reflects ADB’s upward trajectory within Ghana’s banking sector, which counts

financial and

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activities are

expanding at

rougHly twice

tHe pace of tHe

overall economy

and just 30 per

cent of tHe

population

are formally

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industry leaders

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tHe country’s

financial

services future

financial inclusion and smes set

the banking industry is on a quest to bring financial services to the large unbanked population and burgeoning number of small and medium-sized enterprises

27 universal banks, 137 rural and community banks, and 58 non-banking financial institu-tions in total.

“Until 2009, ADB had only 55 branches. Of those, about 88 per cent were located in the southern part of the country. In the northern part of the country, which is about 30 per cent of the surface area of the country, we had only three branches of ADB and the area is predominantly agricultural,” Mr Kpordizh explains. “Today, we have 78 branches, but there are more than 200 districts. We need to make banking more accessible to the entire population.”

While international capital markets play an essential role in this development process, Ghana’s Securities and Ex-change Commission, under the leadership of Director General Adu Anane Antwi, works to create the neces-sary framework for Ghana-ians to play a more active role investing in key areas, giving them a larger stake in the country’s progress. The Se-curities and Exchange Com-mission focuses its efforts on promoting the benefits of the capital markets to Ghana-ians, urging market players to pass on their knowledge and experience to educate people on how to maximise their investments.

“The commission takes investor education very seri-ously,” explains Mr Antwi. “We think it is key because it is our mandate to protect the investor; we believe that a well-educated investor is a well-protected investor. If you look at our research you will see the number of investors is growing and that is a good sign. So we need to do more to get everybody to be part of the capital market.”

Demonstrating the impor-tance of financial services to meet the changing needs of a society approaching middle-income status, total assets within Ghana’s bank-

ing system expanded by 26 per cent annually, on average, from 2008-2012, rising to 33 per cent in 2013, according to the PwC 2014 Ghana Banking Survey. The sector’s resilience in the face of rising inflation and significant regulatory changes can be credited to a growing pool of capital and customers made possible by solid underlying fundamen-tals in the economy, as well as important technological advancements that have the potential to revolutionise the way Ghanaians bank and do business.

Thanks to these broad trends, about six in 10 banking executives in Ghana are con-fident that transformations in the banking sector will result in an overall positive impact on the future of banking in Ghana over the next five years, according to the PwC survey, while a majority of bank execu-tives also say that they are well prepared to make the most of opportunities and overcome challenges in banking over the next five years.

Institutions like ADB are providing the Ghanaian econ-omy the traction it needs to continue meeting its custom-ers’ financial needs.

“The first thing we did in 2009 was to review the busi-ness model and to determine whether it was still relevant for the modern trends,” Mr Kpordizh continues. “Follow-ing that review we developed a new model, which was aligned to the structure. We created a dedicated ag-ricultural financing unit and established an asset finance unit. We did this because one of the challenges for the agricultural sector is lack of access to machinery, plant and equipment, so there was a need to provide a financing lease arrangement. We also created a dedicated retail department, because like it or not, the banking space here is largely retail, so we needed a retail offering.”

banks are expanding their reach as there are currently only five traditional bank branches for every 100,000 inhabitants

Ghana’s explosive growth has in large part been fuelled by the diversity of new op-portunities now available for small and medium-sized enterprises (SMEs) led by an emerging class of entre-preneurs. Banks have helped enable this development by recognising their customers’ priorities and adapting their services accordingly.

“SMEs are a vital compo-nent of our economy,” affirms Nilla Selormey, CEO of Uni-versal Merchant Bank (UMB). “UMB has a strong focus and commitment to the SME sector. Our Business Banking department is dedicated to serving the needs of SMEs. We understand the importance of their success and our special-ists work tirelessly to develop solutions that will provide our SME clients with the capital that they need to grow their business. Furthermore, to a certain extent, the success of retail banking on the continent depends on the strength of your ATM network and your Visa and MasterCard offer. Currently we have 24 ATMs and in the very near future we will be adding 18 additional ATMs to our network.”

UMB serves as an example of the banking sector’s chang-ing face in Ghana as the coun-try progresses up the income ladder. “While we are very proud of our history and past accomplishments, we recently rebranded from Merchant

Bank to Universal Merchant Bank in order to begin a new chapter in the bank’s develop-ment,” Ms Selormey contin-ues. “We are in fact a bank reborn. We will continue in the same spirit of innovation and excellence from which we were created, but adapted for our current context.

“Indeed, our objective is to set the standard for private banking in Africa. The future looks very bright for UMB and we are very excited. Our objective is to be a trailblazer in banking and we will achieve that.”

Adding to the momen-tum of entrepreneurship in Ghana, two years ago Stanbic Bank launched a product to help curb the challenges that SMEs go through before accessing loans, which was meant to revolutionise the Ghanaian banking industry. The product, which is known as the SME Quick Loan, is an innovative way of granting credit to SMEs.

The government is focused on making SMEs the engine of the economy and with new trade opportunities opening up with the EU through the proposed Economic Partner-ship Agreement (EPA), Stanbic stands to benefit.

“We need to make sure that there is rigor around the business operation of SMEs, so we don’t just give them credit, we give them training. And we ensure that over the long term we help them build corporate governance,” says Alhassan Andani, Managing Di-rector of Stanbic Bank Ghana.

Synergies being generated by demand from the retail sector, as well as SMEs, heavy spending on infrastructure projects and complex finan-cial products supporting the

burgeoning oil production sector of the economy have all helped to develop the country’s financial sector.

“Ghana is becoming an oil economy and other activities, especially the capital market, reflect that oil economy,” adds Mr Antwi. “So we expect more oil companies to be listed on the stock exchange. How do you get them listed? You have companies that are rendering services, you have oil-marketing companies, but they need help.”

To address this need, Mr Antwi has been promoting a new fund to help raise capital for domestic companies op-erating in the sector.

“This oil and gas fund is a mutual fund, in which everybody is invited to join, because it’s a pubic company, regardless of the amount of money you have. The size of the initial entry is just 50 Ghana cedi (£9.70),” he adds. “If we can all put our small funds together, before we will have realised it, we will have 50 million cedi or what-ever large amount that these companies can draw for their operations. So this fund is going to invest heavily in all these companies, be it drilling or services for the oil and gas sector. They will all have some investment coming from this fund, which will help them move their resources on the banks. People always rely on banks for their working capi-

tal and other capital needs. Once they are able to mobi-lise their resources, then they will be there to make sure that people who need money in the oil and gas industry – at least the service providers – are able to also get invest-ments from this side.”

Another important devel-opment in Ghana’s financial sector has been its integra-tion into regional and global capital markets. “We finally established the West African Capital Markets Integration Council,” Mr Antwi says. The council’s member-countries – comprising Ghana, Nige-ria, Sierra Leone and the Bourse Regionale des Valeurs Mobilieres (BVRM), which features eight Francophone countries – gave their approv-al to fast-track the integration process in September 2014.

“Our plan is to make sure that by the end of this year

we will be able to have trade amongst ourselves,” explains Mr Antwi. “We are in the first phase, which we call sponsored assets, where if you have a broker in Ghana you can trade in the stock exchange in Nigeria through another broker in Nigeria. These are the things we are doing and we hope that they will bring us a bigger market.

“So if you are in Ghana and you have a floating of shares, they are not only available for Ghanaians – they are available for everybody in West Africa. Therefore you have a bigger market. It will help raise a larger amount of funds to be able to sponsor our opera-tions as individual companies and together our GDP will grow. This will also help to go forward in the issuance of regional bonds, because if you have an integrated mar-ket then it is easier for you to issue a regional bond that can be sold across the region, whether by a government or by a private sector.”

The country’s financial sec-tor has been buoyed by a 64 per cent rise in net profits, a loan portfolio that has been profitable for three con-secutive years, and a positive return on investment that reached 4.2 per cent last year. Furthermore, additional capi-tal being generated in the oil and gas sector, among other sources, is allowing institu-tions like ADB and UMB to roll out long-term expansion plans.

“We have achieved a 60 per cent growth in deposits and we expect this number to in-crease with the new financial products and services that we will be unveiling,” UMB’s CEO Ms Selormey adds. “Last year we had 22 branches located throughout Ghana and by the end of this year we will have a minimum of 32 branches.”

As a result, banks are now contemplating moves into profit centres not typi-cally associated with emerging markets in Africa. “We are looking at new customer segments, including high net worth individuals,” the UMB chief explains. UMB’s expand-ing services also include the launch of its private banking department earlier this year.

Focusing on these trends, it is easy to see why Ghana’s financial leaders continue to be upbeat on the sector’s future. “Since the beginning, Ghana has been making the best of any opportunities that Africa presents to the world,” says Felix Nyarko-Pong, CEO of UniBank. “2008 saw the financial crisis in Europe, but it goes beyond that – margins have dried out over there, and investors are looking for oth-er opportunities. What better place than Africa, where we have returns running in dou-ble digits for many sectors? In Africa, some economies – Ghana included – retained double-digit growth through 2011, and Ghana still managed 8 per cent last year while Europe and America still struggle.”

“Our growth depends on the growth of the country,” adds Prince Kofi Amoabeng, CEO of UT Bank. “UT Bank is positioned as the hero for SMEs. We have lending ap-peal to that sector because we are responsive to their needs. “SMEs will remain the engine of growth, and they need to be supported. We will not change our focus, it is just a matter of building more robust structures to do what we have envisioned to do.”

Even as the domestic economy provides ample opportunities, participating in the global economy will be essential to the industry’s growth and development, executives say.

“We need to understand that as a country, we require some other resources to complement what we have. We are hoping that the re-lationship with the UK will deepen,” Mr Nyarko-Pong continues. “We want all good-meaning businesses to come here and take advan-tage of the win-win oppor-tunities being offered here in the full confidence that the environment set here is no different from what is set out there in the UK to help make the investments not only safe but grow.”

GHANATUESDAY, OCTOBER 21, 2014 3

“we need to make banking more accessible to the entire population”stephen Kpordizh, Managing director of adB

“smes are a vital component of our economy. umb has a strong commitment to the sme sector”nilla selormey, Ceo of uMB

growth in total assets in the banking

system in 2013

33%

universal banks 137 rural & community banks 58 other financial

institutions

27

mobile technology advances, low penetration rates, rising prosperity and ghanaians’ enterprising spirit mean the potential for growth in banking services is huge

to soar

THE GLOBAL AFRICAN INVESTMENT SUMMIT

AGRIBUSINESS

INFRASTRUCTURE

The heads of state of four African nations – Ghana, Rwanda, Tanzania and

Uganda – will meet in London on October 20-21 with inves-tors from around the world, to seek financial support for the projects their countries need in order to assure their eco-nomic and social development. The Global Africa Investment Summit, a first-ever event, will bring together investors and fund managers who represent more than $265 billion of capi-tal under management, with the presidents, government ministers and CEOs of state

companies in sub-Saharan Af-rica. The event is designed to bridge the gap between the financial world and the lead-ers of African nations whose huge economic potential is being held back by a lack of financing. The objective is to convince the deep pockets that putting funds into Africa is not a charitable enterprise but a profitable business venture. The African delegates will pitch projects in four major areas: natural resources, agribusiness, power and infrastructure. A to-tal of 130 plans, large and small, will be discussed. They range

in size from a $13.5 billion in-ternational railway connecting Kenya, Uganda and Rwanda to a $200,000 tomato processing facility in Ghana. Among the other projects are a solar pow-er plant in Kenya, a new airport in Rwanda and an oil refinery in Uganda. Although most of the projects are government-sponsored, they also include several private initiatives. The projects have been chosen as ones that will spur economic development, by creating employment and promoting technology transfer. The chair-person of the Global African

Investment Summit is former Nigerian President Olusegun Obasanjo. Apart from execu-tives from major international investment banks and private equity firms, the delegates will also include representatives of African investors, such as the sovereign wealth funds of Nigeria and Rwanda. In addi-tion to presentations on the specific projects that require financial backing, the confer-ence will include sessions on legal protection for investors in Africa, on the continent’s capi-tal markets and on its emerging middle class.

With an infrastruc-ture deficit total-ling $1.5 billion

annually over the next dec-ade, Ghana has embarked on a series of transformative projects to meet the needs of its growing economy.

With a rapidly developing business climate, growing regional and global trade, as well as an expanding popu-lation, Ghana’s public sector leaders have recognized the need to attract investors from all over the world to help finance investments needed in airports, roads, ports, railways, power and other vital sectors.

“Ghana is a middle-in-come country and aspires to be a dynamic economy. For this, you need proper en-ergy, water supply and com-munications services,” ex-plains Dr Cadman Atta Mills, Senior Presidential Advisor, Office of the President, in an exclusive interview with PM Communications. “A lot of investment has to take place in those sectors for us to become competitive, even in our domestic market.”

Public sector leaders like Dr Mills have helped to build bridges and establish cooperation with world-class private companies, paving the way for unprec-edented investments in the country’s infrastructure. It’s a process that the Of-fice of the President looks

to repeat in critical sectors throughout the economy.

“There is a lot of scope for public-private partner-ships in infrastructural de-velopment,” Dr Mills con-tinues. “These partnerships can take place in the area of housing, for example, and also public transport. Hous-ing is something important, not only socially but also for productivity. Sanitation is something where there can be useful partnerships, and also direct investment. The government provides the right environment for the private sector to invest.”

One area in particular that evidences Ghana’s suc-cess in establishing deep public-private infrastructure coordination is the coun-try’s maritime transport in-dustry. Roughly 80 per cent of exports and imports in Ghana transit the coun-try’s ports. Modernizing port infrastructure to pave the way for the country’s emergence as a major West African trade hub is one of the chief goals of the Ghana Ports & Harbours Author-ity (GPHA), which expects to award contracts worth $2.5 billion through 2018 to double capacity, handle larger ships and reduce waiting time for vessels in the country’s Takoradi and Tema ports.

“Today, the West African region is seeing the devel-

opment of a number of major government pro-jects within the maritime sector, right from Senegal to Ghana, and down to Angola,” says Richard An-amoo, Director General of GPHA. “That is a huge investment in infrastruc-ture.”

“Logistics is the driving force for any economy,” adds Kofi Mbiah, CEO of Ghana Shippers’ Authori-ty. “Transportation plays a key role in development. Investment in this area is important…I want to see a future in which trans-port is seen to play a key role in the development of the economy, and to see it more integrated than it is today. If these things are re-alized, I can say the future will be bright.”

Upgrades to allow deeper vessels to enter Ghana’s Ta-koradi Port will boost trade revenue by $490 million, ac-cording to the African Cen-tre for Economic Transfor-mation. Due to its proximity to increasingly productive oil and gas deposits, includ-ing the offshore Jubilee field operated by London-based Tullow Oil, Takoradi Port is strategically located to sup-port exploration and pro-duction activities.

The GPHA plans to spend at least $450 million on improvements to the port that will allow it to receive

bigger vessels, improve turn-around time, eliminate congestion and double han-dling of cargoes, significantly reducing the cost of doing business. This is in addition to several hundred millions of dollars of planned up-grades at the Tema Port, ad-jacent to the capital Accra, that will double its contain-er handling capacity, among other improvements.

“The maritime sector is developing, as a natural con-sequence of the growth of the living standards of the people,” Mr Anamoo ex-plains. “Ghana is waking up to opportunities that are there. I strongly believe that investors need to look at that, come in, and put their money where they can be sure that opportunities will arrive in order for them to get the benefits.”

GHANA TUESDAY, OCTOBER 21, 20144

Paul Sinclair, Event Director of TGAIS

“The Global African Investment Summit will see government delegations from Africa present bankable investment opportunities to an audience of institutional investors, fund managers, PE firms and large corporations”

Of all the investment opportunities availa-ble right now in Africa,

agribusiness offers one of the most dramatic examples of how development can spread prosperity and improve the quality of people’s lives. The World Bank estimates that Africa’s food markets could create $1 trillion of business opportunities by the year 2030. Food production, which currently accounts for more than 50 per cent of the con-tinent’s total economic activ-ity, could triple with access to more capital, technology and modern farming techniques, according to the World Bank’s figures. The continent holds nearly half of the world’s to-tal area of fertile uncultivated land, some 450 million hec-tares that are not forested, protected, or densely populated, it es-timates.

Ghana, a country blessed with an extraordinarily con-ducive climate and an abun-dance of fertile land, encap-sulates this transformative potential. Already the world’s second-largest source of co-coa and a significant producer of rice, cassava, peanuts and corn, Ghana is currently seek-ing financing for a variety of agribusiness projects, includ-ing a $6 million fertilizer pro-duction plant, a $6 million rice storage warehouse and doz-ens of similar initiatives.

“More than 67 per cent of our workforce is in agricul-ture and more than 60 per cent of household income of lower income groups is spent on purchasing food. So ben-efits from investments in ag-riculture and agro-processing

are more

readily distributed among society,” explains Michael Abu Sakara Foster, Executive Chairman of Sakfos Holdings, adding that this “makes it a natural place to start to be-gin pushing investments that favour empowerment of our youth in order to make it a dividend for our economy and Ghana in the future.”

Ghana has also received sig-nificant support and financing from multilateral institutions like the World Bank, which is currently implementing the five-year, $100 million Ghana Commercial Agriculture Pro-ject (GCAP).

The benefits of developing local agriculture can be seen in the output from some of Gha-na’s best-known food brands. “We make every effort where we can to utilize local raw ma-terials and ingredients for our products, be it through local

farmers or local suppliers,” says Anthony Grendon,

Managing Director of Accra Brew-

ery Ltd (ABL). “The more we develop this opportunity the more we grow the symbi-otic rela-tionship.”

“ D e -ve lop ing

agribusiness helps to develop the rest of the economy and we have committed to do so through local material sourc-ing of inputs for our prod-ucts,” adds Peter Ndegwa, Managing Director of Guin-ness Ghana Breweries. “Two years ago we had a very high import content of about 90 per cent; we have moved this down to 60 per cent through dedicated focus on our in-tent. In the long term our goal is to have our products made from 60-70 per cent

local content.” Producing these kinds of locally sourced products can have a major impact across Ghana’s agri-cultural sector, officials say. “Currently Ghana exports raw materials, we need to shift that paradigm in order to add value and create more jobs,” says Joe Tackie, CEO of the Office of the President’s Private Sector Development Strategy II. “The government is very important in this sense as it provides the right environment.”

A glimpse of how this pro-cess is impacting the coun-try can be seen in emerging sub-sectors. “We have pro-grammes to work hand in hand with the private sector,” says Clement Kofi Humado, Former Minister of Food and Agriculture. “The agro-indus-try is coming up. The process-ing of nuts, of cereals and the like, is now catching up. There are also a lot of financial ser-vices developing around agri-culture.”

The establishment of the National Commodities Ex-change, meanwhile, will help Ghana tap into opportunities in the region and help open up its markets to the world. “The creation of the exchange will be a game-changer, adds Mr Tackie. “It will position Ghana as a hub and a crop centre in West Africa.”

“Currently Ghana exports raw materials, we need to shift that paradigm in order to add value and create more jobs”Joe Tackie, CEO of the Office of the President’s Private Sector Development Strategy II

“Logistics is the driving force for any economy. I want to see a future in which transport is...more integrated than it is today”Kofi Mbiah, CEO of Ghana Shippers’ Authority

NATURAL RESOURCES

POWER

The discovery of oil and gas in Ghana’s territo-rial waters has brought

a flurry of activity that is now starting to reverberate throughout its economy. In less than five years, Ghana has progressed from virtually no oil production, to 110,000 barrels per day (bpd) cur-rently, on the way to 200,000 bpd in 2016 and 500,000 bpd within a decade.

As the sector continues to pick up momentum, busi-nesses build up the kind of critical mass that creates synergies and contributes

added value to the wider economy.

Ghana’s oil sector alone expects to see $20 billion in investments over the next five years, as output increases and oil production and oil service providers proliferate. This sum by itself represents a significant surge in activity in a country that generates about $45 billion annually in total economic activity.

“We have no problems get-ting investment because we have one of the best basins in the world,” says Alexander Kofi Mensah Mould, CEO of

Ghana National Petroleum Corporation (GNPC). “We have one of the most recent and largest discoveries in the world…The idea for us is to attract investment to do the exploration work. The rate of return is quite attractive, especially if you get a sizable field like Jubilee.”

GNPC was established in 1983 as a state-owned entity to undertake the exploration, development, production and disposal of petroleum in Ghana. To further its mission of developing a thriving do-mestic oil industry, GNPC is currently seeking $1 billion in efficient capitalization to fund its plan to become an inde-pendent operator in seven years and will also seek to build an oil-trading desk with its partner Unipec.

Ghana’s first productive field, Jubilee, operated by the UK company Tullow is expect-ed to continue to make up a sizable share of the country’s

output, but numerous depos-its are being explored that are expected to diversify produc-tion and add significantly to the country’s overall production.

“We have three fields we are working on right now; we are extending Jubilee, we have the TEN project which is going to be completed in 2016, and the Sankofa project, which should be completed by the end of 2016,” Mr Mould continues. “We have major discoveries from Hess, and we have a lot of work go-ing on in the fields.”

Ghana has opened its doors to the capital, technol-ogy and expertise of large in-ternational oil companies, but it has also worked to ensure that local companies are also able to reap the benefits of the country’s endowment of natural resources. “The Lo-cal Content Law says: bring Ghanaian companies up to speed, teach them the way to do it, and let them work with

you,” says Mr Mould. “We are looking for long term invest-ment… We should sit down at the negotiation table to work out a win-win agree-ment. It is important that the British bring their business to Ghana so they understand what the Local Content Law is about, and to identify part-ners who add value to their business.”

As Ghana’s oil sector con-tinues to mature, the country is eyeing another sea change in its energy industry: the production of domestic natu-ral gas for power generation. Ghana National Gas Com-pany is expected to start de-livering natural gas from the Jubilee fields by the end of the year. While most of the initial output will go to newly upgraded power plants, it will also provide 70 per cent of the country’s liquefied petro-leum gas and officials hope that it will lead to the devel-opment of a lucrative petro-chemicals industry, with the production of fertilisers that will boost agriculture.

“Gas will introduce in the economy a new set of in-dustrial sectors that will be beneficial for the economy,” explains George Sipa-Adjah Yankey, Chief Executive Of-ficer, Ghana National Gas Company. “We will produce and supply a constant supply of gas to support industries currently facing shortages. Industries will also benefit im-mensely from increased gas supply.”

The emergence of a do-mestic natural gas industry

has been spearheaded by domestic down-stream operators. “Bulk Oil Storage and Transporta-tion (BOST) has the licence to operate the na-tional gas trans-mission utility in the country,” ex-plains BOST Man-aging Director, Kingsley Kwame Awuah-Darko. “That is huge because eve-rybody knows Ghana is not going to make it on the back of oil, but gas. The infrastructure we need to roll out on the back of that natu-

ral gas transmission utility is core to our development as a country.”

“Nobody should underesti-mate this,” Mr Awuah-Darko continues. “It will remove a massive bottleneck for our country’s development. That

bottleneck is in power, pri-marily, but also resource re-lief, because we have been increasing our power produc-tion with crude oil imports (of about $3-4 million a day). When you have gas coming out of the Jubilee fields, the

next five-year supply is at no cost for the government. You basically take $3 million a day out of your cash flow. That is a huge relief on your fiscal pres-sure. That becomes a massive bottleneck we will unblock just by coming on-stream.”

GHANATUESDAY, OCTOBER 21, 2014 5

“We have three fields we are working on right now; we are extending Jubilee, we have the TEN project which is going to be completed in 2016, and the Sankofa project, which should be completed by the end of 2016”

Alexander Kofi Mensah Mould, CEO of Ghana National Petroleum Corporation

At the centre of Gha-na’s growth strategy is a massive invest-

ment in the country’s pow-er sector that will provide the means to improve the lives of millions of Ghana-ians with reliable electric-ity. At the same time, the country expects to fire up its first power plants fuelled by domestically produced natural gas – a development that officials estimate will cut generat-ing costs in half. This steady supply of affordable elec-tricity stands to reshape the country’s competitive landscape and position Ghana as a regional energy hub.

President Mahama has stated that the completion

of the pipeline delivering natural gas from offshore fields to power stations will cut crude oil purchases by half a billion dollars a year, in addition to a billion dollars in foreign exchange savings. Since this project will increase electricity generation using waste gas coming from existing crude oil production, it will also significantly cut down on the production of green-house gases.

Ghana achieved another important milestone in August with the signing of the Millennium Challenge Compact II, which secures $498.2 million of assistance to build up Ghana’s elec-tricity sector and target private investment of up to $4 billion.

“The Compact II consists of six projects, all of which

respond to constraints to economic growth by aim-ing to improve the reli-ability and quality of power in Ghana,” says Dr Alfred Ofosu Ahenkorah, Execu-tive Secretary of Ghana’s Energy Commission.

“The supply of reliable power, reduced losses, ef-ficient use of resources and support from renew-able energy will result in a very vibrant electricity sec-tor which will, in turn, spur economic growth, which we so badly need at this stage of our development.”

The billions of dollars needed to upgrade Ghana’s power system cannot be raised solely from domestic investors, officials say. “The demand for electricity in Ghana grows about 12 per cent every year. That is very high, and it means that at least 200MW of additional generation is required eve-ry year,” explains William Amuna, CEO of GRIDCo, the state company respon-sible for power transmis-sion. “Ghana is a developing country and the investment for this additional capacity cannot be generated local-ly. This calls for large-scale foreign investment.”

Driven by this impera-tive, the government has laid out a strategy to al-most double the country’s power generation capac-ity by 2016, raising it to 5,000MW from the current estimated installed capacity of 2,900MW, through en-gaging in partnerships with multilateral institutions and private sector stakehold-ers to deliver world-class results. General Electric (GE), for example, is set to spend five years building a 1,000MW gas-powered thermal power plant.

GRIDCo has numer-ous projects planned to extend and upgrade sub-stations and transmission lines to ensure a robust transmission system spans the country. Its CEO says, “One of GRIDCo’s strate-gic objectives is to ensure that we develop the trans-mission infrastructure so it is capable of evacuating any new generation to the vari-ous load centres. We don’t want a situation whereby new power plants are ready but power can’t be evacuated. We are there-fore seeking funding from various sources to ensure that we expand the system to meet increased supply and demand.”

As the country’s power sector rapidly evolves, reg-ulators have assured that green energy will make up a significant part of the mix. Ghana’s 2011 Renewable Energy Act requires that the country obtain at least 10 per cent its energy mix from renewable sources by 2020. This has helped make possible initiatives like the Nzema project in Western Ghana, which when com-pleted will be the largest solar plant in Africa with a peak capacity of 155MW, according to its British de-veloper, Blue Energy.

“On renewable energy we have the task of doing two things: promoting and regulating it,” Dr Ahenko-rah says.

“We need to create a level playing field for all. Recognising the potential of renewable energy, we put together guidelines and regulations to enable li-censed operators to devel-op that source of energy. So far we have issued quite a big number of licences.”

GRIDCo has led the way in terms of support for re-newables. Mr Amuna points out that Ghana has long been over-reliant on hydro energy, the reliability of which is affected by rainfall patterns.

“Assuming hydro fails, we must explore other strategies,” GRID-Co’s CEO says.

“We are also interested in r e n e w a b l e energy, like solar. Two c o m p a n i e s have inter-acted with us about set-ting up solar plants. GRID-Co consid-ers solar as a reliable power alternative for hydro. During the day, we can rely on solar energy, and re-duce demand on the hy-dro generators. This is why we are amenable for solar coming into the system.”

When solar investors approach GRIDCo, the company conducts a grid impact study to primarily access its impact on the re-liability of power and also ascertain the transmission investments required, if any, for its seamless inte-gration.

“Renewables are a good option for us,” says Isaac

Kirk Koffi, CEO of Volta River Authority (VRA). “Our target is 10 per cent of our own energy will be renewable. We are doing solar and we are going to start with wind.”

All of these develop-ments help serve Ghana’s 25 million citizens, but will also positively impact the greater region, officials say. Ghana has tradition-

ally been a leader in power generation, thanks to effec-tive management through institutions like GRIDCo, the Energy Commission and the VRA.

About 70 per cent of the country’s population has access to electricity, one of the highest rates in sub-Saharan Africa. While this places Ghana near the top of its region, millions in underserved areas in West Africa still lack a reliable source of electricity.

“We have the sea and big hydro. That makes it easier for us to make our costs attractive,” says Mr Koffi. “Through the West African Power Pool, we made in-terconnection lines among ourselves: the one between Ghana and Togo-Benin, and we made another to inter-connect with Nigeria. Plus, there is a plan to build one all the way to Liberia and one between Ghana, Burki-na Faso and Mali.”

Mr Amuna adds: “If you invest in Ghana, you have the potential to export power to any part of the sub-region. Ghana is there-fore the ideal destination for power investment.”

“If you invest in Ghana, you have the potential to export power to any part of the sub-region”

William Amuna, CEO of GRIDCo

“We put together guidelines and regulations to enable licensed operators to develop renewable energy”Dr Alfred Ofosu Ahenkorah, Executive Secretary of the Energy Commission

“We will produce and supply a constant supply of gas to support industries currently facing shortages”George Sipa-Adjah Yankey, CEO of Ghana National Gas Company

“When you have gas coming out of the Jubilee fields, the next five-year supply is at no cost for the government”Kingsley Kwame Awuah-Darko, Managing Director of Bulk Oil Storage and Transportation

William Amuna, CEO of GRIDCo

GHANA TUESDAY, OCTOBER 21, 20146

primed for win-win partnershipsworld-class firms take advantage of gHana’s favourable investment climate and drive gHana’s economy forward tHrougH partnersHips

“you soon realise the massive opportunity that exists [here]. african regional reports talk about accra and kumasi as some of the more desirable cities to do business in on the continent”anthony Grendon, Managing director of accra Brewery Ltd

All across Ghana, public and private sector entities are

entering into strategic, long-term partnerships to further the country’s de-velopment in key areas. A string of megaprojects have attracted the participation of world-class firms from industrialised nations who are taking advantage of Ghana’s democratic institu-tions, rapid growth, favour-able investment climate and willingness to engage with the private sector to achieve major public works.

“If you look at recent reports that reflect the potential of Ghana, you soon realise the massive op-portunity that exists,” says Anthony Grendon, Managing Director of Accra Brewery Ltd (ABL). “African regional reports talk about Accra and Kumasi as some of the more desirable cities to do busi-ness in on the continent. The more investor-friendly press and attention that Ghana can receive will only aid and fuel international fund-ing and support. Current investors in the country will benefit from and contribute towards this momentum. The message we are send-ing is one of confidence in the future and faith in the government to make the required fiscal adjustments.”

ABL is one of Ghana’s most iconic brands. Its suc-cess using local ingredients in the creation of unique, value-added products re-flects the aspirations of many businesses in the country. “Our past can often dictate our future, so reflection is important,” Mr Grendon continues. “The history of Accra Brewery has proven that it is a truly Ghanaian company. Often we are just seen as a beer company. I like to think that Ghanaians

see ABL as their trusted and preferred supplier of bever-ages.” The original business was registered in 1931 in Switzerland as the Overseas Breweries Limited. In April of 1975, local registration took place to pave the way for Ghanaian participation and Accra Brewery Ltd was born. In 1997 SABMiller plc, then South African Brewer-ies, acquired controlling interest in the company. “In more recent times the key milestones have been the ac-quisition of the number one water business in Ghana, Voltic Natural Mineral Wa-ter, and owning the number one beer brand in Ghana with our iconic ‘Charlie’ – Club Premium Lager,” says the MD. The shrewd Voltic acquisition has given ABL, the oldest brewery in West Africa, an 85 per cent share in Ghana’s mineral water market.

Significant reforms to Ghana’s tax system, now administered by the Ghana Revenue Authority (GRA), have been essential to the process of facilitating the growth of companies like ABL, and creating a transpar-ent, fair and equitable invest-ment climate. In December 2009, the GRA replaced three separate tax revenue agencies, taking over the administration of taxes and customs duties in the country with a new mandate to simplify, modernise and streamline domestic tax and customs operations. GRA is at the end of the process of creating one electronic platform for administrating all domestic taxes, repre-senting a huge logistical success following the 2009 reorganisation and a major step forward in the ease of doing business in Ghana.

“We need a tax system that is friendly to investors

in general,” explains George Blankson, Commissioner General of the GRA. “A minimum tax burden and administration of taxes in the most transparent way, to make them predictable, is the best way. The shift from the previous paradigm, where you gave exemptions to attract investors, gave way to a fair and transpar-ent collection of taxes, and using resources to develop the economic, business and infrastructural environment to attract investors. We are no longer focused on using exemptions as bait for in-vestors, but the on creation of a conducive environ-ment. Taxpayers and inves-tors are often not worried as much about the level of tax, as with the predictabil-ity of tax burdens, so they can do planning. Where you have discretion, they cannot do planning, and that hurts the investor even more than the level of tax itself. We try to ensure taxpay-ers that the tax system is transparent.”

“In Ghana, especially in the last decade, the private sec-tor leads the growth process and the modernisation of the economy,” Mr Blankson con-tinues. “We have generally referred to the private sec-tor as the engine of growth for the economy; and not only the private sector from within Ghana. When we look outside Ghana, we are talking about foreign direct investment (FDI). Economic policies are being designed to attract as much FDI as we can, to make Ghana an attractive destination for in-vestors. With private capital mobilised from outside, the growth and development of Ghana will be huge.”

“We are not looking just for money from investors,” adds Joe Tackie, CEO of

Private Sector Development Strategy II, Office of the President.

“We are looking to gain experience from foreign partners in terms of business strategy. The interaction with foreign partners drives the economy forward. We must have a global mindset and be ready to import and assimilate global knowledge. The world is flat and brings

about business opportuni-ties.” The strategy, led by the office of President John Mahama, aims to make the country an attractive place for local and international entrepreneurs to start up businesses, encourage inves-tors to put money into the economy and give incentives to businesses to create se-cure, well-paying jobs.

“Public-private partner-ships (PPPs) are the logical way for Ghana to grow,” adds Rashid Pelpuo, Minister

of State for Public-Private Partnerships and Private Sector Development. “More and more, the thinking is that we need the private sector to share the risks. PPP is one of our key areas in investment needs, to get the private sector as a part-ner. Ghana is ripe for that, because where there are economic challenges, busi-ness can flourish.”

To help catalyse this pro-cess, Ghana has worked with multilateral institutions like the World Bank to supply the technical and financial support to generate a pipe-line of bankable PPP projects. Demonstrating this desire to bring in private-sector part-ners, this year Ghana agreed on a $600 million plan with Lonrho Ports, a subsidiary of London-based Lonrho Plc, to build and operate a new, dedicated oil services terminal in western Ghana,

called the Atuabo Freeport. The terminal is expected to save 20 days of travel time for rigs operating off the coast of West Africa, which currently travel to South Africa for repairs and maintenance. The strategic plan is to create the right environment for oil-related businesses to come in and create jobs, while providing valuable services to a blos-soming industry. “That is a very innovative approach,” Mr Pelpuo says of the Atu-abo Freeport. “Without that facility, if we produce oil in great quantities, we have to repair our ships outside of the country. Businesses should take advantage of these opportunities, so we can work together and establish a working relation-ship over time. We can sign a PPP agreement and work with them for many years.”

A similar approach in-formed the decision to partner with Cox Oil, a Texas-based company, to build a $600 million refinery at Ghana’s Takoradi Port. The new, state-of-the-art re-finery will supplement aging installations and provide the necessary infrastructure to bring value-added petroleum products to Ghana, as well as exports to the West African region. Recently announced initiatives to set up two new gold refineries follow this pattern, aiming to capitalise on Ghana’s abundant natural resources by allowing the lo-cal population to participate in the creation of world-class refined products, while generating income and sup-porting the wider economy.

In the food sector, mean-while, companies like ABL and Blue Skies serve as in-formative examples of how moving up the value chain creates a win-win scenario for businesses, investors and

the wider population. Blue Skies adds value to Ghana’s produce by processing and packaging it within the country, as well as employing more than 2,500 people and sourcing fruit from in excess of 150 local farms. By ship-ping a finished product from Ghana, Blue Skies generates superior revenues and cre-ates numerous employment opportunities that would not possible with the export of raw materials. Blue Skies cur-rently sells products in two leading British supermarkets, Waitrose and Sainsbury’s, and has plans to expand in Europe and the Americas.

“Seventeen years ago, we had 35 people,” says Anthony Pile, Chairman of Blue Skies. “Now have 2,500 just in Ghana, and four other facto-ries sprinkled across Africa and South America. We have excellent air links and we have a qualified workforce; there is no reason why we can’t process raw materials here. Ghana has got to look at its mindset and focus on processing. Ghana has to become an export economy. It has to export industrial products with added value at source. That way, it could make a big profit.”

This approach has also helped ABL to create a lo-cally integrated supply chain. “When you have a brand or product that utilises domestic raw materials im-mediately your value chains are inextricably connected,” Mr Grendon, ABL’s director, explains. “ABL provides jobs for thousands of Ghanaians as well as supporting the live-lihoods of farmers through our brands that utilise locally produced raw materials. Our interest in our farmers does not stop there; we also assist them with new techniques and farming processes to facilitate productivity.”

fdi in ghana was over $3.6bn in 2013, with us and uk investors leading the way, totalling $1.2bn and $6.2m respectively

“ppp is one of our key areas in investment needs, to get the private sector as a partner. ghana is ripe for that, because where there are economic challenges, business can flourish” rashid Pelpuo, Minister of state for Public-Private Partner-ships and Private sector development