Invest in Ghana: Focus KUMASI March 2008
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KUMASI This publication was made possible due to the cooperation of: Invest in Ghana: Focus KUMASI March 2008 C European Business I P Council for Africa G and the Mediterranean UNCTAD INVEST IN GHANA: FOCUS KUMASI March 2008 Millennium Cities Initiative The Earth Institute at Columbia University New York, 2008 DISCLAIMER This publication is for informational or implied. This publication does not purposes only and is meant to be purely constitute an offer, solicitation, or recom- educational. While our objective is to mendation for the sale or purchase of any provide useful, general information, the security, product, or service. Information, Millennium Cities Initiative, the Columbia opinions and views contained in this publi- Program on International Investment and cation should not be treated as invest- other participants to this publication make ment, tax or legal advice. Before making no representations or assurances as to the any decision or taking any action, you accuracy, completeness, or timeliness of should consult a professional advisor who the information. The information is provid- has been informed of all facts relevant ed without warranty of any kind, express to your particular circumstances. Invest in Ghana: Focus Kumasi © Columbia University, 2008. All rights reserved. Printed in Canada. ii PREFACE Ghana, along with 189 other countries, The challenges that potential investors adopted the Millennium Declaration in would face are described along with the 2000, which set out the Millennium Devel- opportunities they may be missing if they opment Goals (MDG) to be achieved by ignore Kumasi. 2015. The MDG implementation process is spearheaded by Ghana’s National The Guide is intended to make Kumasi Development Planning Commission. and what Kumasi has to offer better known to investors. Although we have This Guide is part of the Millennium effort had the foreign investor primarily in mind, and was prepared by the Millennium Cities we believe that the Guide will be of use to Initiative (MCI), which is an initiative of domestic investors in other parts of Ghana The Earth Institute at Columbia University, as well. While by no means the sole driver undertaken in cooperation with the of growth and development, foreign direct MDG Support Team at the United investment does have a distinctive role to Nations Development Programme and play. Not only does it bring scarce capital, the Columbia Program on International it also brings know-how, technology and Investment. The MCI is guided by Jeffrey access to foreign markets. Furthermore, D. Sachs and co-directed by Susan it helps improve the competitiveness of Blaustein and Karl P. Sauvant. Its initial domestic enterprises, which must be the effort focusses on helping eight cities in foundation of all growth. seven African countries attract more for- eign direct investment (FDI). The cities are: We hope that our investor readers find this Kisumu, Kenya; Blantyre, Malawi; Kumasi, Guide a useful practical tool. Ghana; Akure, Nigeria; Bamako–Segou, Mali; Louga, Senegal; and Mekele, Ethiopia. For more on the MCI, see the MCI website: www.earthinstitute.columbia.edu/mci/. The Millennium cities were chosen in part for their proximity to the Millennium villages (http://www.earth.columbia.edu/ millenniumvillages/). In the case of Kumasi, the second Millennium city to have an investors’ guide prepared for it, the Millennium village is Bonsaaso in the Amansie-West District of the Ashanti region. The idea behind this Guide is to offer the reader a brief description of investment opportunities in the Kumasi area, supple- mented by a description of the investment climate and of the broader context of Ghana and West Africa. The MCI does not believe that serious investors can be attracted to an area through a purely ‘promotional’ approach, one that pro- motes the positive while hiding the nega- tive. So the Guide is written to be credible. iii ACKNOWLEDGEMENTS This Guide was prepared by the Jeffrey and Tony Cheung, Pat Egham, Millennium Cities Initiative (MCI) of James Geisel, Adonis Halaby, Jemima Mills, Columbia University (see Preface), under Umesh Menon, Ayuko Nimura, Awudu the responsibility of Karl P. Sauvant, Osman, Emmanuel Osei, Augustine Otoo, Co-Director, MCI, and Executive Director, E.A. Owusu-Ansah, Kingsley Twumasi and Columbia Program on International Joseph B. Winful. In addition, the Ghana Investment, and Joerg Simon, Senior Investment Promotion Centre and its web- Investment Adviser, MCI. The preparation site were important sources of information of the Guide and its release were done for the Guide. together with the United Nations Conference on Trade and Development The preparation of the Guide was under- (UNCTAD). We are grateful to the Ghana taken in parallel with four other related Investment Promotion Centre, the Kumasi efforts, all focussing on investment oppor- Metropolitan Assembly and the Office of tunities in Kumasi and the regulatory the Regional Minister for Ashanti for their framework governing it. More specifically, cooperation in this project and in the KPMG Special Services BV in cooperation MCI’s work in Kumasi more generally. with KPMG Ghana prepared an invest- We are also grateful to the Association of ment opportunities report which will be Ghanaian Industries and the Office of the available at http://www.earthinstitute. Asantehene for assistance with the work- columbia.edu/mci/ and www.cpii.colum- shop held in connection with the Guide. bia.edu. The United Nations Industrial We thank Vishwas P. Govitrikar, the lead Development Organization (UNIDO) pro- consultant for the Guide, and Abenaa vided the list of investors in Kumasi inter- Akuamoa-Boateng, the MCI project ested in foreign collaboration contained manager in Kumasi, for their role in in Appendix A; a CD is available upon developing this Guide, including the request from [email protected]. A report organization and conduct of a feedback by Kingsley Twumasi outlines investment workshop in Kumasi. opportunities in mining around Kumasi and will be available at http://www.earth- Our thanks are owed to the companies institute.columbia.edu/mci/ and www.cpii. and government agencies that participated columbia.edu. And DLA Piper prepared an in the workshop in Kumasi, as well as to assessment of the regulatory framework the government agencies that participated for FDI, currently being finalized. The in a feedback meeting in Accra hosted by results of these efforts were extremely the Ghana Investment Promotion Centre. valuable for the preparation of this Guide. Among those who provided inputs to the Guide or the workshop, we should particu- Photographs for the Guide were larly like to thank Robert Ahomka-Lindsay, provided by Prince Okyere and Vishwas K. Amponsah-Efah, S.B. Apeadu, Patricia P. Govitrikar; they pertain to Kumasi and Appiagyei, Akenten Appiah-Menka, neighbouring areas. Administrative Mariam Asigri, Ginger Baker, Amy and assistance in Kumasi was provided by Thomas Bello, Susan Blaustein, Philomena Emmanuel Kwarteng. Nelson Vigneault Boakye-Appiah, Giannetto Caraceni, designed the Guide. iv TABLE OF CONTENTS iii Preface 43 III. Taxes and laws iv Acknowledgements 43 1. Taxation in Ghana 1 Table of contents 43 • Taxes on profits and income 3 Executive summary 45 • Taxes on goods and services 4 Maps 46 • Taxes on international trade 5 Ghana and Kumasi in brief 47 • Other taxes 7 I. The broader context 48 2. Legal framework for investment 49 • Investment law 7 1. A sketch of Ghana & 50 • Incorporation and exit West Africa 51 • Priorities and restrictions 7 • The country 51 • Investment protection, investor 9 • The region treatment & dispute settlement 10 2. The economy 52 • Land 12 • Markets for investors 53 • Foreign exchange, etc. 13 • Exports and imports 14 • Foreign direct investment 55 IV. Investors and 14 • Aid, debt, reserves, etc. investment climate 55 1. Investor assessment of the 17 II. Investing in Kumasi investment climate 17 1. Introduction 57 2. Foreign investors in Kumasi 18 2. Opportunities for investors and in Ghana 18 • Main areas of interest to potential investors 60 Appendices 28 • Other areas of interest to 60 A.UNIDO list of domestic potential investors investors interested in 31 3. Incentives, EPZs and foreign collaboration related matters 63 B. Pointers to further information 31 • Incentives in Ghana 32 • Investment and tax treaties 65 Sources consulted 33 4. The business environment 33 • Infrastructure 37 • Human resources 38 • The private sector in Kumasi 39 • Doing business in Ghana 41 5. Kumasi as an investment location: A summary for investors 1 Kumasi’s natural endowment is phenomenal and can provide basic raw materials for many industries. In addition, at present, Ghana provides one of the best investment environments in Africa, with long tax holidays, duty-free entitlements, immigration quotas, and a good chance to do profitable business. Among the areas investors can explore are agriculture, medicinal plants, timber, mining for gold and industrial diamonds, etc. Giannetto Caraceni, General Manager, Modern Wood Technology Co. Ltd The Kumasi Metropolitan Assembly is delighted by the publication of this guide and hopes that it serves to make Ghana’s second largest city widely known to investors abroad. As the guide shows in some detail, Kumasi and the surrounding districts abound in opportunities for entrepreneurs. My colleagues and I look forward to welcoming investors from all over the world and assure them in advance of our support and assistance. Patricia Appiagyei, Metropolitan Chief Executive 2 EXECUTIVE SUMMARY Kumasi is a substantial city of 1.6 million as well as fruit-juice and vegetable-oil people in the rainforest region of Ghana, processing. There are also opportunities in about 270 km northwest of the capital, tourism, since Kumasi is the historical capi- Accra. In the pre-colonial period, it was tal of the Ashanti kingdom as well as a the seat of the Ashanti kingdom, which natural stopover for tourists following the occupied an area somewhat larger than North-South slave route. The city also the present-day Ashanti region.