Economist Cautions Against Scrapping Minimum Capital Requirement for Foreign Investors
Finance and Economics Professor, Godfred Bokpin, has urged government to tread carefully in its plans to scrap the minimum capital requirement for foreign investors under the Ghana Investment Promotion Centre (GIPC) Act.
Speaking on the sidelines of Prudential Bank’s Special Customer Seminar on sustaining the appreciation of the cedi, Prof. Bokpin warned that while the move could boost foreign investment inflows, it risks exposing local enterprises—particularly small and medium-sized businesses (SMEs)—to unfair competition.
He explained that the minimum capital requirement serves as a safeguard for indigenous firms, especially in sensitive sectors such as retail, and scrapping it without alternative protections could erode the competitiveness of Ghanaian businesses.
“Removing this threshold without adequate protective measures could allow foreign players to dominate areas reserved for local entrepreneurs. This would weaken the capacity of Ghanaian businesses to grow and create sustainable jobs,” Prof. Bokpin cautioned.
He further stressed the importance of a balanced approach that attracts foreign direct investment (FDI) while safeguarding local industry. According to him, failure to manage the process carefully could stifle the growth prospects of SMEs.
“It has the potential to affect our small businesses, so we need to find ways to manage it well,” he added.
President John Mahama has announced that the revised Ghana Investment Promotion Centre (GIPC) Act will remove the minimum capital requirement for foreign investors seeking to set up businesses in Ghana.
Speaking at the Ghana Presidential Investment Forum on the sidelines of the 9th Tokyo International Conference on African Development (TICAD-9) in Japan, President Mahama said the reform will allow investors, regardless of the size of their capital, to enter the Ghanaian market.
“In the reviewed Ghana Investment Promotion Centre Act, we’re removing the minimal capital investments. This will enable any investor, however little money you have, $100,000, $50,000, to be able to come in and set up a business in Ghana,” he stated.
