Good morning, distinguished ladies and gentlemen.

I welcome you all to today’s event and thank you for making time to be part of an evolving discussion but which I believe will cover all aspects as never done before in this country.

Let me thank BUSAC with whom we collaborated very well on this novel research work. It is instructive to mention that When we wanted to understand the economic and business challenges between 2011 and 2016 and make recommendations to the government at the time, BUSAC again under its able leadership, Nicolas , Edayatu and the team supported the research. And so clearly Busac respects local content and will be supporting IMANI’s quest to establish a Financial Industry WatchDog – Towards a Sustainable Financial Industry in Ghana. We can pick up that conversation later, Nicolas, but it is important to emphasize that had one of the banks that ran into difficulties in 2014 had understood the chaotic local content and local participation arrangement in Zimbabwe, which our dear Barbra will be explaining shortly, it wouldn’t have burnt $5m of liquidity support from the central bank in prospecting minerals there.

Similarly had the Bank of Ghana understood that insisting on raising minimum capital requirement from 60m to 120m.amd then to 400m within a decade was not the best way to enhance local participation or ownership in the Ghanaian economy as banks set up for different purposes and not all of them should be universal banks simply because they must compete with foreign owned banks.

And I hope as Parliament’s Finance Committee sits today to understand what really happened to many of our banks these two examples will guide them. However they must not sit in Camera for the hearings. My senior colleagues at IMANI have linked Parliament’s decision to sit in camera over the banking difficulties to conducting a marriage ceremony for two black magicians, male and female, performing vanishing acts in the dark while planning to kiss each other at the same time.

Recently we heard about the hue and cry over an exercise to flush out foreigners in our local markets. IMANI’s immediate concerns about the planned exercise and as in previous cases under the past government are however focused on the quality of the GIPC Act itself, whether it advances our nation’s economic interests, whether it contributes to sound policy making, and whether in fact it makes coherent sense.

We note that it has been 11 years since the Ghanaian cabinet under three governments was advised by the GIPC of the need to update the Act. Even though the Act was revised in 2013 We have not seen any policy paper from the immediate past government and the current one in connection with the need to upgrade the investment laws of this country to align with the country’s current and evolving needs.

In the case of what is obliquely referred to as: “trading enterprises”, there is a requirement that the foreign investor puts up a minimum of $1,000,000 in capital and employ very few Ghanaians. The Act stipulates that foreign traders cannot do businesses from “kiosks”, or engage in what is referred to as “hawking”or “petty trading.

The perverse implications of these arbitrarily thrown together provisions mean that there is virtually no proper elucidation of real-world supply chains. There are no guiding principles for wholesale, distribution, retail, logistics, or cartage.

There is absolutely nothing in the law that stops 200 foreigners from forming a cooperative with 10 Ghanaians, pooling up the minimum capital, and registering the cooperative as a business with the members identified as employees, and then operating from the backs of minivans as is the practice in many countries.

Even worse, since the law precisely defines a “trading enterprise” to mean a business “involving ONLY the purchasing and selling of goods”, any value-added services render the meaning of the act unclear. For example, a meat trading enterprise that also offers dressing, cold storage, and cartage may or may not fall within this category. It is similarly unclear if a distributor that receives consignments of products from a wholesaler and distributes same for commissions (i.e. does not “buy” but only sell) shall be operating within the letter of the law.

Nor is it clear to anyone why it is alright for big foreign traders to invest in Ghana but not small foreign traders. If the goal is, as many have interpreted it, to “protect” small Ghanaian traders from marauding foreigners, what is the logic behind allowing big trading entities to set up marts and malls here then? Aren’t small-scale Ghanaian traders more threatened by giant retailers and commodity distributors? As someone has observed, one giant supermarket in a convenient location in Accra could easily wipe out 10,000 traders, something 1000 petty-trading foreigners may not be able to achieve.

The blind enforcement of the regime has also led us to the bizarre situation where even as we preach regional integration we are blocking other ECOWAS nationals from participating in our economy because they cannot afford $1,000,000 at get-go, knowing very well that business success is rarely about start-up capital and almost always about entrepreneurial energy, management and dedication.

It is important for policymakers to realise that Ghana is now in the shrinking minority of countries that insists on arbitrary minimum capital requirements for entrepreneurs and investors from outside seeking to participate in the economy and certainly for local banks.

Certainly, local content is not enhanced when 88% of port charges are not directly linked to the services provided but rather for revenue generation as a USAID research revealed.

However, the point must also.be made clearer that we want foreigners partaking in our economy to be above board and make clean disclosures about their minimum local content declarations. In one of my conversations with a regulator in the upstream petroleum sector, I was mortified to hear the dodgy calculations and subsequent deductions made by some companies. But for a critical enquiry by the regulator, Ghana would have been shortchanged. Perhaps this is the reason we.need to clarify our local content rules. Perhaps when the draft local content policy from the trade ministry is finalized we will be well served.

Meanwhile at IMANI we eat data and produce evidence , which is what the team of diligent young men and women, equal in number do everyday and will.be presented to you shortly. But they need your support. We are grateful to the Danish Embassy and Ambassador Tove for the kind support given IMANI since 2014 as we both think through Ghana’s tax systems to.enhance domestic revenue mobilisation and accountability in usage. We have a few publications displayed at the registration desk. Please buy some to keep the work going at IMANI.

Thank you very much for coming.