The primary goal of the Government of Ghana is to create a first class social and economic infrastructure that guarantees the future prosperity and quality of life for Ghanaians.
To achieve this goal, the government has opened its arms widely to attract foreign investment to help accelerate growth in the country through the acquisition of capital, entrepreneurial and managerial skills and technology.
Although investment has slowed down globally, Ghana is making modest inroads in the direction. According to the Ghana Investment Promotion Centre (GIPC), the agency responsible for facilitating investors activities, FDIs rose to $54.75million during the first six months of 2005, up 15.7 percent on the $442million for the same period in 2004.
This success has been attributed to the attitude of the government towards the private sector. While the latest figures come nowhere near the $132million attracted in 2000, commentators are quick to point out that global investment inflows to Africa have played a significant role in the number and value of investments recorded.
This can be attributed to two key factors. The first is the Governments' own aggressive marketing efforts. The other is through the efforts of private sector operators in selling the country's investment opportunities abroad.
Another factor is the attractive package of incentives which include easy remittance of dividends, profits, and fees, tax incentives and a liberalised import regime and foreign exchange transactions.
Government ensures that the private sector, which is seen as the pillar of the government's 'Golden Age of Business,' contributes to the socioeconomic development of the country.
The GIPC Act provides for the automatic award of investment incentives, such as import duty exemptions and income tax incentives.
The GIPC deals with investment from all sectors except three - mining and petroleum (dealt with by the Minerals Commission and the Ministry of Mines and Energy), Free Zones (The Free Zones Bard) and portfolio investment (Ghana Stock Exchange).
Furthermore, there is a number of tax holidays in all sectors of the economy to ensure that the country becomes the hub to the robust 250 million West African market.
Cocoa farmers and producers, the country's number one exchange earners, have complete exemption from income tax and this has served as an incentive to increase yields. Cattle ranching as well as palm oil, Shea butter, rubber, and coconut production are also tax-exempt for 10 years.
To expand the market for local agricultural produce and encourage and promote value addition through agro=processing, government had granted a 5 year tax holiday for new investment in this sector. At the end of the tax holiday, corporate income tax for agro-processing industries is to be fixed according to location. For Accra and Tema it will be 20 percent. Other regional capitals will attract 10 percent, while those outside the regional capitals will attract zero percent.