GFZA’s transformational agenda to revive economy, solve FX challenges
Good morning, cherished members of the media, and thank you for accepting our invitation to attend this media briefing. On behalf of the Board, management, and staff of the Ghana Free Zones Authority (GFZA), I welcome you all to this media briefing organized as part of the Investment Week celebration.
This is my first Investment Week celebration since I took over as Chief Executive Officer in August 2021 and, thus, my first media briefing, even though I have had other media engagements.
We are celebrating 26 years of implementing the free zones program this year. We are celebrating this milestone with a week-long event to showcase our achievements and prospects to both local and foreign businesspeople and Ghanaians in general. This year’s Celebration is under the theme ‘GFZA: Championing Export-Led Industrial Growth in the Context of AfCFTA and World Trade.’
The theme was chosen to reflect the government’s focus on export-led industrialization and the Africa Continental Free Trade Area Agreement (AfCFTA) implementation. As a country, we are currently grappling with a balance of trade deficit and the depreciation of our national currency.
Therefore, we must increase our exports to earn the needed foreign exchange to stabilize the cedi. An export-led industrial growth is one of the most appropriate strategies to achieve economic development; this has been the mandate of the GFZA. Thus, the importance of the Free Zones program in reversing our balance of trade deficit and the depreciating cedi is vital.
In this regard, the government keenly explores the opportunities presented through the AfCFTA. The GFZA recognizes the potential of the AfCFTA in attracting market-seeking investments and encouraging local businesses to export to the African market. The AfCFTA presents Ghana with the opportunity to export to Africa, with an estimated market size of 1.3 billion people.
In pursuing an export-led industrial growth strategy and the enormous opportunities AfCFTA and the world at large provide, the problems of unemployment, low export earnings, lack of value addition to our natural resources, lack of diversification of our export products, and being an insignificant player in the continental and global value chains can be solved.
To achieve this objective, we have set up an AfCFTA desk at the GFZA.
This media briefing is the first activity of the Investment Week celebration. The essence of this briefing is twofold. Firstly, this briefing is to update you on the achievements of the GFZA and the plans for the coming year, which we kindly expect you to convey to the good people and business community of Ghana. Secondly, we would like to brief you on the activities scheduled for the weeklong investment celebration.
Ladies and gentlemen, despite the adverse effects of global happenings on businesses worldwide, Ghana not being an exception, the GFZA has chalked up some significant successes.
Regarding our achievements, 39 new companies have been licensed since I took over as Chief Executive Officer. These companies are expected to inject an estimated capital of US$230 million into the economy. In addition, the estimated export earnings from the 39 companies is US$529million from an estimated production value of US$436million. I am also happy to report that the cumulative exports from the Free Zones enterprise since the program’s inception stood at US$27billion as of 2020.
Currently, the total number of active companies is 217. Out of the 217 active companies, 72 are wholly owned Ghanaian companies, representing 33percent; 74 are wholly foreign-owned companies, representing 34percent; and 71 are joint ventures, representing 33percent. This is an indication that Ghanaian companies also have the potential to take advantage of the free zone incentives and make a mark in the international market.
I am giving this breakdown because the Free Zones program has been misconstrued as favouring mainly foreign investors. On the contrary, the program is open to all investors, both foreign and local. Moreover, with the opportunities that AfCFTA also offers, we are encouraging Ghanaian-owned businesses to take advantage of the 1.3 billion African markets to expand their activities.
The impact of these achievements on the economy cannot be overemphasized.
With regards to the development of the designated SEZs, under my leadership, the Authority has signed a memorandum of understanding with a private developer for the development of about 1,500 acres of land designated in Yabiw/Shama in the Western Region.
The proposed investment is estimated at US$250million to US$300million. It is expected to provide world-class infrastructure such as roads, electricity with a dedicated power plant, sewage treatment plant, container depot, office complex, and residential complex, among others. In addition, the project, when completed, will lead to thousands of jobs and increased foreign exchange earnings for Ghana.
So far, the site has been resurveyed, and the legal processes has been initiated to gazette the site as a Free Zone Industrial Park. I want to thank HE. President Nana Addo Dankwa Akufo-Addo, the Minister for Trade and Industry, the Hon. John Alan Kwadwo Kyeremanten, and the Minister in charge of the Western Region, the Hon. Kwabena Okyere Darko-Mensah, for their constant support regarding this unprecedented project.
For analysis, the Authority has also collected data on some key sectors of the Ghanaian economy, such as crops and livestock production, forestry and timber, minerals, and petroleum, existing industrial developments, ports and logistics, imports and exports, the cost of doing business, and taxes. The data is expected to enable the developer to establish the availability of raw materials in the region and country to ensure sustainable production by companies. The signing of the main contract is imminent.
Regarding the designated processing zone in the Ashanti Region, commonly associated with the Boankra Port or the Greater Kumasi industrial project, compensations for the land and economic activities have been finalized.
Ladies and gentlemen, our flagship SEZ, the Tema Export Processing Zone (EPZ), benefited from a World Bank/Ghana Economic Transformation Project, which provided funding for rehabilitation works within the zone, including the construction of roads and a fence wall.
Also, funding was received from the German Corporation (GIZ) to provide an e-mobility transport system within the Tema EPZ to provide affordable transportation for employees within the enclave. Furthermore, electric buses will be procured with the option of being charged with solar power to ensure sustainability and reduce carbon footprints in compliance with the SDGs.
Before I assumed office, the Tema EPZ faced severe water supply issues. However, in collaboration with the Ghana Water Company, the water supply issues have drastically improved from around 30percent prior to 75percent at present. Currently, the water storage capacity at the enclave has also been improved.
In addition, the Authority is in talks with the Ghana Gas Company to supply gas directly to the Tema EPZ as an alternative energy source for the companies. Ladies and gentlemen, I am pleased to tell you that these talks have concluded positively and are awaiting implementation. This will again contribute to the “zero carbon footprint”, as previously espoused.
Regarding security, the Authority procured two motorcycles for the Kpone Police Command to enhance patrol of the enclave and to enhance security. I will also like to thank Cocoa Touton, who bought an additional motorbike for the same project.
The current trend in industrial development is towards the development of Special Economic Zones, which is a broader concept than Export Processing Zones. The Ministry of Trade and Industry, which is our parent Ministry, is therefore in the process of developing an SEZ policy. Hopefully, the Free Zones concept will be rebranded into an SEZ in line with current trends.
As you may be aware, the AfCFTA Agreement allows goods from Special Economic Zones (SEZs) or Export Processing Zones (EPZs) to export to Africa under preferential treatment if they meet the rules of origin. Thus, free zone enterprises utilizing local raw materials from Ghana, specifically, or Africa as a whole, can qualify to export under the AfCFTA. The GFZA, with its mandate to promote export-oriented investments, is one of the critical agencies if Ghana is to benefit from the AfCFTA.
The Authority is collaborating with the AfCFTA National Coordination Office (NCO) to develop a GFZA/AfCFTA strategy to integrate AfCFTA into our activities.
Ladies and gentlemen, if there are any lessons to be learned from the COVID-19 pandemic, it taught us that deploying technology is the way to go. Thus, most of the Authority’s approvals have been migrated online under the ICUMS single window.
Members of the media, as part of our corporate social responsibility, the Authority identified breast cancer as a serious issue affecting women. As a result, it instituted a breast cancer awareness project during the breast cancer awareness month of October. The next addition will be Prostate cancer, which is prevalent among men.
Ladies and gentlemen, as we advance, the Free Zones Act will be reviewed in line with the new SEZ policy once it is approved. The new strategy of my management is to embark on more targeted marketing by identifying potential businesses or businesspeople, both locally and internationally, and attracting them to locate in the designated SEZs. We will also focus on rigorous monitoring and compliance to ensure that free zone enterprises comply with the rules and regulations.
As an additional service, we have recently introduced the concept of “aftercare” to provide value-added services to existing free zone enterprises within our mandate to make their investment in Ghana worthwhile. I have already embarked on regional tours to visit some free zone companies with the team to understand their issues and assist in resolving them.
Members of the Media here present, as I indicated, the second reason for having this media brief is to update you on the activities lined up for the Investment Week celebrations. The week-long celebration starts from 5th to 9th December, with this media briefing.
The week-long celebration will see the GFZA engaging the media and the business community through roadshows, one-on-one interactions, interviews, organized enclave/SEZ visits, and many more. The Celebration will climax with a CEO’s networking session to be attended by Senior Government officials, Ministers of State, CEOs, and Captains of Industry at the Marriott Hotel on December 7th 2022.
The 3rd Annual Ghana Free Zones Investment Week meeting will discuss a pathway for supporting exporters to optimize exports within Africa and beyond.
On this note, I am most grateful to you again for accepting our invitation to be here today. This media briefing is supposed to be an interactive session, so kindly ask all the questions you may have and seek clarification on any issue. But, more importantly, please take the success story of the GFZA out to the public. Ladies and gentlemen, I thank you very much for your time.