Story: Boahene Asamoah
In a bid to attract Foreign Direct Investment (FDI), governments throughout the world have adopted several strategies and policy directions which have contributed in enhancing the inflow of foreign direct investment.
One such policy is the Free Zone concept. About 10 years ago, Ghana adopted the Free Zone Concept, which was meant to encourage competitive enterprises to establish themselves within zoned boundaries, mainly to produce for export.
Free Zones (also referred to as Export Processing Zones (EPZs) or Special Economic Zones) have been effectively used, and are currently being applied, in a variety of settings to introduce market oriented economic and institutional policy reforms in several countries such as Ireland, Taiwan, South Korea, Mauritius, Nigeria, Togo, Namibia, and the Republic of China.
In some of these countries, the application of the Free Zones/EPZ Policy option has led to the attraction of competitive enterprises to establish zoned boundaries mainly to produce for export. Ghana's case is not an exception.
To enable Ghana provide the necessary environment for the attraction of investments therefore, the Free Zone Act 1995 (Act 504) was enacted by Parliament to, among other things, facilitate the establishment of free zones in Ghana for the promotion of economic development and also to provide for the regulation of activities in free zones and for related purposes.
In 1996, the Ghana Free Zones Secretariat was established, paving the way for the Implementation of the Programme.
By the enactment of the Free Zone Act, the country opted to further enhance its economic liberalisation programme by offering elaborate fiscal, trade and investment incentives to encourage the production of goods and services primarily destined for export markets through the attraction and utilisation of Foreign Direct Investment and increasing the role of the local private sector.
This was to kick start Ghana's economy with the objective of creating employment opportunities; attracting foreign direct investment/capital and encouraging local processing of (and value-addition to) manufactured products and increasing foreign exchange earnings with the aim of arresting the decline in the value of the cedi.
The free zones concept was also meant to promote transfer of technology; enhance technical and managerial skills/expertise of Ghanaians; and, ensure diversification of exports.
These innovative sets of objectives are expected to be achieved through the enhancement of industrial production and service by giving prominence to the private sector.
The country's programme is designed to promote the processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encouraging the development of commercial and service activities at sea and in the air.
In essence therefore, the whole of Ghana is accessible to potential investors who have the opportunity to use the free zones as focal points to produce goods and services for foreign markets.
The country's programme is also linked to the “Gateway” objective of developing sustainable growth in the private sector through major economic and social improvements in the physical infrastructure and also creating a shift in attitude and institutional arrangements.
It also seeks to promote the country as the trade and investment gateway to West Africa.
The programme is completely private sector driven, limiting the government's role to that of facilitating, regulating and monitoring activities of free zone developers/operators and enterprises in the country.
The mission of the Ghana Free Zones Board therefore, is to help transform the country and position it as the gateway to the West Africa sub-region by creating an attractive and conducive business environment through the provision of competitive free zone incentives and the operation of an efficient “one-stop-shop” for the promotion and enhancement of domestic and foreign investment.
The Ghana Free Zones Board was therefore mandated by the Free Zone Act to:
a. Grant licences to applicants under the Free Zone Act;
b. assist applicants for licences under the Free Zone Act by providing services for obtaining other relevant licences, permits and facilities;
c. examine and recommend for approval agreements and treaties relating to the development and activities of the free zones;
d. monitor the activities, performance and development of free zone developers and enterprises;
e. ensure compliance by free zone developers and enterprises of the Free Zone Act and any other laws relevant to free zone activities.
f. register and keep records and data on the programmes of developers, operators and enterprises in free zones;
g. perform such other functions as are incidental to the foregoing.
By this mandate, the GFZB is responsible for all activities relating to the implementation of the Free Zones Programme. However, the GFZB collaborates with all front-line and revenue agencies having any bearing on the operations of licensed Free Zone Enterprises.
Ten years down the line, the Free Zones Concept has provided some tremendous opportunities for the country. These achievements could be seen in the areas of employment creation, technology transfer, diversification of the country's exports and higher exports earnings to the country.
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