SOUTH African companies should to use Ghana as a launch pad to expand their investments into the rest of Economic Community Of West African States (ECOWAS) regional bloc, economic experts have said.
Several speakers at the recent Ghana Trade and Investment Forum, which the Mail & Guardian Africa organised in Johannesburg, South Africa, last week, noted that the peace and stability prevailing in the West African country were encouraging.
Ghana is seen as among the most politically stable countries in the largely volatile region.
According to analysts present at the forum in South Africa, none of the countries in the ECOWAS region can surpass Ghana in terms of stability. The country is also strategically located in the region.
In addition, Ghana has been spared the upheavals posed by the Islamic militant Boko Haram terror sect, as well as various al-Qaeda offshoots that have characterised the region.
Other ECOWAS members include Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.
In an exclusive interview with Mail& Guardian Africa at the Ghana Trade and Investment Forum, Ghana Tourism Authority (GTA) Chairman, Akunu Dake, said some countries in the West African region, though promising as consumer markets, were politically unstable hence South African companies should consider using Ghana as an economic base to penetrate other ECOWAS members states.
“Ghana is strategically located in such it can be used as an economic launching pad into the rest of West Africa.
“Most importantly, Ghana boasts long lasting political peace and stability that would ensure security of South African companies investing in the country,” Dake said.
Call to build ties
He called upon the South African corporate world to build strong economic ties with Ghana and forge a new lease of cooperation, trade and investment in order to promote trade among African member states under the African Union (AU).
Dake said Ghana was ready to work with South Africa’s multinational, middle class and the general business community in tapping into vast investment opportunities in Ghana such as tourism, hospitality, film industry, arts, oil and gas, energy, roads construction, infrastructure, financial and health to boost the two countries’ cooperation.
“Many South African companies and business people do not know much about Ghana, except our national football team, so I would like to urge the companies and business leaders to come and try business investment in Ghana,” Dake said.
Speaking at the same event, Ghana High Commissioner to South Africa, Kwesi Ahwoi, said his country’s central strategic position made it the best investment destination in West Africa, linking the region with Europe and the rest of the world.
He called upon South African companies to make the most of the opportunity to maximise their profits and investment in Ghana as they also explored other avenues to invest other countries in West Africa.
Ghana High Commissioner to South Africa, Kwesi Ahwoi.
“If one talks about visibility, strategic positioning, peace and stability, then Ghana is the country to be. It is necessary for inspiring South African investors to use Ghana as their base for entering other West African member states,” Ahwoi said.
Liberal economic policies
Apart from the political and economic stability, Ahwoi noted that entry requirements into Ghana were conducive for business to thrive. He said Ghana has liberal economic policy that allows foreign-owned companies to repatriate their dividends to any country or countries of their choice.
“Our country allows companies to retain their 100% ownership but in instances where they wish to partner locals, they can have joint partnerships with locals,” Ahwoi said.
He said there was no rule compelling foreign companies to cede their shareholding as is the case in some countries in the continent.
In a separate interview with this publication, South Africa’s Department of Trade and Industry Acting Director for West African Region, Lebogang Makoloi, said his country was at the event in Johannesburg to assist the local companies interested in investing in West Africa with adequate information to ensure they had background information.
Makoloi said the peace and economic stability prevailing in the West African country were conducive for South African companies to invest in Ghana and eventually, the region.
“While I call upon local (South African) companies to invest elsewhere across the African continent, Ghana included, I would like to urge our companies to do so in liaison with our department so as to get the right information about the country or investment destination they are venturing into,” Makoloi said.
The investment forum in Johannesburg came on the back of the Department of Trade and Industry initiating trade missions, the most recent being to Mozambique, to African countries with a view of assisting businesses in the country grow their investments in the continent.
Relations between Ghana and South Africa date back to the apartheid era when the Kwame Nkrumah administration provided a safe haven for many freedom fighters and youth from the Southern African country to pursue further education in Ghana.
Ghana’s 50th independence anniversary celebrations. Ghana gained independence from Britain in 1957. (Photo: Flickr/ Oluniyi Ajao).
Following the end of the apartheid regime in South Africa in 1994 and the first democratic elections in Ghana in 1992, relations grew extensively with the establishment of bilateral relations.
The duo established formal diplomatic relations on May 25 that year to coincide with the 31st anniversary of the then Organisation of African unity (OAU). All post-apartheid leaders of South Africa have visited Ghana, the last such visit coming in 2013 when Jacob Zuma toured.
In 2005, the South African Institute of International Affairs, a non-governmental research institute focused on the country’s and Africa’s international relations, reported that South African investors called Ghana a “beacon of hope” in West Africa and the volume of trade between the two economies was growing extensively.
On the economic front, Ghana represents the biggest export market for South Africa’s goods in West Africa after Nigeria.
In recent years, trade between South Africa and Nigeria has grown significantly, with South African exports increasing from less than under $30 million in 2008 to current levels of more than $61 million, indicating the maturing of economic relations between the countries.
Exports have included vehicles, machinery, mechanical appliances, electrical equipment, base metals, aircraft, vessels and associated products. Imports from Ghana have increased over the same period.
While total trade volumes are still relatively low in global terms, it is expected that these figures will grow further. There are more than 80 South African companies registered in Ghana.
According to 2013 estimates, South Africa’s gross domestic product (GDP) stood at $350.6 billion while that of Ghana is $48.14 billion.