Before the 1983 Economic Recovery Program, nationalized enterprise was the cornerstone of Ghanaian investment policy. Under the supervision of the IMF and World Bank, the government styled its policies on the model of a number of Asian countries where encouragement of the private sector and foreign direct investment (FDI) are considered essential to sustained economic growth. The principal law on FDI is the Ghana Investment Promotion Center (GIPC) Law of 1994, which governs investments in all sectors except minerals and mining (under the Minerals and Mining Act of 1986 as amended in 1994 and administered by the Minerals Commission), oil and gas (under the Petroleum Exploration and Production Law of 1984 administered by the Ghana National Petroleum Corporation— GNOC), and the free trade zones, established in 1996. The 1994 investment code guarantees the free transferability of dividends, loan repayments, licensing fees, and the repatriation of capital; provides guarantees against expropriation; and provides for dispute arbitration. Foreign investors are not subject to differential treatment on taxes, prices, or access to foreign exchange, imports, and credit.
The GIPC is responsible for promoting direct investment in Ghana. The only performance requirements are that a foreign investor must have at least $10,000 in capital for joint ventures, $50,000 for wholly foreign-owned ventures, and $300,000 for trading companies, and that the latter must employ at least 10 Ghanaians. The free trade zone consists of land near the seaports of Tema and Takoradi and the Kotoka Airport. To qualify for free zone incentives—a year corporate tax holiday and zero duty on imports—the business must export at least 70% of its output. Small enterprises—petty trading, taxi services with less than 10-car fleets, beauty and barber shops, small scale mining, pool betting businesses, and lotteries besides soccer—are reserved for Ghanaians.
Since 2000, the government has transformed its general foreign investment promotion strategy to specific firm target promotion directed at production centers of Europe and Asia. The objectives of the program are to attract firms that seek to local and sub-regional markets and which contribute to value-added production using raw materials available in Ghana.
Because a number of different agencies are involved in the promotion and monitoring of FDI in Ghana, published statistics tend to be unreliable and unreconciled. For the period 2000 to 2002, the GIPC reported it had licensed 510 projects representing a total investment of $351.2 million, $297.9 million of which was FDI and $53.3 million local funds. Of these, 342 were joint ventures and 169 wholly foreign-owned. From 1997 to 1999, FDI averaged $66.7 million a year (UNCTAD estimates), compared to the $100 million a year 2000 to 2002. In the first quarter of 2003, FDI was reported at a record-setting pace of $56.7 million, $49.7 million of which was for projects in the service sector.
The major foreign investment projects in Ghana have been in mining and manufacturing. The United Kingdom has been the largest foreign investor, with investments exceeding $750 million, primarily through Lonmin Plc's 32% stake in the Ashanti Goldfields Corporation, In 2003, Lonmin was in the process of selling its stake to Anglogold of South Africa, which was negotiating taking over the Ashanti Goldfields. The largest firm operating in Ghana is Valco, operated by the American company, Kaiser and Reynolds Aluminum, whose guaranteed use of electric power for aluminum refining made possible the building of the Volta Dam and its hydroelectric generating plant. In early 2003, a drought caused an energy crisis in Ghana and brought Valco's operations to a near standstill. Other American companies operating in Ghana include Teberebie Golfields Limited, CMS Generation (independent power producer), Affiliated Computer Services (since 2000, involved in developing offshore business process outsourcing projects), Regimanuel-Gray Limited (construction), Coca-Cola Company, Phyto-Riker (pharmaceuticals), Westel (ICT company formed by the partnership of Western Wireless International and Ghana National Petroleum Company), Pioneer Foods (Star-Kist Tuna), Union Carbide, Amoco, ChevronTexaco, and ExxonMobile.