Collins Sefa The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, has warned that the wholesale removal of minimum capital requirements for Foreign Direct Investment (FDI) could be detrimental to indigenous businesses.
A Call for a Sector-Specific Approach
Rather than scrapping the requirements entirely, the GNCCI boss proposed a sector-by-sector approach. He suggested that capital-intensive industries such as mining and large-scale manufacturing should be liberalised to draw in big investors. Conversely, smaller sectors like retail—where many Ghanaian businesses thrive—should be shielded from aggressive foreign competition.
“We shouldn’t do a blanket removal,” he stressed, adding that Ghana needs to give local businesses time and support to build resilience.
The GIPC Law and Proposed Amendments
Currently, Section 28 of the GIPC Law (Act 865) sets minimum FDI capital requirements at:
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US$200,000 for joint ventures with at least 10% Ghanaian ownership
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US$500,000 for wholly foreign-owned enterprises
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US$1 million for wholly foreign-owned trading enterprises
However, reforms announced by former President John Dramani Mahama during his state visit to Japan would scrap these requirements altogether.
Risks to Local Businesses
Mr. Badu-Aboagye warned that removing these safeguards could expose sectors like retail to foreign dominance. He noted that some foreigners have already taken over low-capital ventures such as barber shops, undermining indigenous ownership.
He further cautioned that access to cheap capital gives foreign investors an unfair edge, enabling them to offer lower prices that could collapse local shops.
“We will end up creating an economy that is owned by foreigners,” he cautioned.
Link to Cedi Depreciation
The GNCCI boss also linked foreign dominance to recurring cedi depreciation. He explained that repatriation of profits by foreign companies contributes to exchange rate volatility, whereas Ghanaian-owned firms would retain their earnings locally.
Call for Cautious Reforms
Mr. Badu-Aboagye urged government to enforce existing laws that restrict foreigners from engaging in petty trading and transport services, while also screening out “fake FDIs” that bring in goods instead of genuine capital.
He concluded:
“The least we can do is put in some of these capital requirements to ensure we protect the areas where we have capacity. We have just started and I think we should tread cautiously.”
