News Guide Africa

Tag: Minority Caucus

  • High costs and taxes sparking “capital flight” …putting Ghana’s investment climate under threat

    High costs and taxes sparking “capital flight” …putting Ghana’s investment climate under threat

    Economic experts, business leaders, and lawmakers are raising urgent alarms over the future of Ghana’s investment landscape, warning that a combination of prohibitive capital requirements and a “world-leading” tax burden is driving investors away to neighboring competitors.

    The Ghana Investment Promotion Centre (GIPC) and the Minority Caucus in Parliament have both issued separate but reinforcing warnings last week, suggesting that the country’s status as a preferred investment destination in West Africa is rapidly eroding.

    High entry barriers stifling competition

    The GIPC has highlighted that Ghana’s high minimum capital requirements for foreign investors are increasingly becoming a bottleneck. While these requirements were originally designed to protect local businesses and ensure serious investment, the GIPC notes they are now hampering the country’s competitiveness.

    Industry analysts argue that as other African nations lower entry barriers to attract tech startups and manufacturing hubs, Ghana’s rigid financial thresholds are forcing potential investors to look toward markets like Côte d’Ivoire and Nigeria instead.

    “Highest burden in the world”

    Simultaneously, the Minority Caucus in Parliament has sounded a whistle on the mining sector, claiming that Ghana now imposes one of the highest tax burdens on mining firms globally.

    According to the Minority, the current fiscal regime, characterized by a mountain of levies and royalties, is actively triggering “capital flight.” They warn that major mining conglomerates are beginning to divert their exploration and expansion budgets to other jurisdictions where the tax environment is more predictable and less aggressive.

    “We are seeing a trend where capital that should be staying in Ghana to create jobs is flying out because the cost of doing business here has become unbearable,” a spokesperson for the caucus stated.

    Stability: The non-negotiable factor

    Amidst these fiscal concerns, business leaders are calling for a return to macroeconomic stability. At a recent investment forum, CEOs and entrepreneurs emphasized that while tax rates are a concern, “unpredictability” is the ultimate deal-breaker.

    The leadership of the business community stressed that for Ghana to attract the long-term capital needed for industrialization, the government must ensure a stable exchange rate and a consistent policy framework. They argued that investors can plan around high taxes, but they cannot plan around a volatile currency and frequent changes to the “rules of the game.”

    Call for reform

    The converging reports suggest a critical turning point for the Ghanaian economy. To maintain its competitive edge, the GIPC is advocating for a review of the investment laws, while business leaders are pushing for a more collaborative approach to fiscal policy.

    With the 2026 fiscal year underway, the government is under increasing pressure to balance its need for domestic revenue with the necessity of maintaining an environment that does not scare off the very capital it needs to grow.

     

     

  • $335m tax waivers: minority fears of ‘organised crime traps’.

     

     

    Adnan Adams Mohammed

    The Minority Caucus in Ghana’s Parliament is alarmed with the value of tax waivers government is set to request on behalf of the companies under the One District One Factory (1D1F).

    The tax waivers amounting to over $335 million meant for 42 companies are awaiting parliamentary approval. Among the beneficiaries is the newly established Sentuo Oil Refinery Limited, set to receive the largest exemption of $164.6 million.

    Ghanaian Parliament

    In 2021, the Ministry of Finance initiated efforts to secure approximately $335 million in tax exemptions for these companies, part of the 1D1F initiative.These exemptions fall under the Exemptions Act, 2022 (Act 1083), presented to Parliament by former Finance Minister Ken Ofori-Atta. Yet, the obvious politicisation of such critical issue that needs patriotic scrutiny have started.

    “It is the considered view of the Minority that these requests for tax exemptions running into several billions of cedis, are unconscionable, inordinate and bear all the trappings of organised crime”, Minority Leader, Dr Cassiel Ato Forson criticised the exemptions.

    “..We in the Minority are serving notice that we shall resist these tax waiver applications fiercely! In their current forms, we shall resist each and every one of the tax waiver applications with all the tools and strategies at our disposal.”

    Hon Ato Forson, a prominent figure in the Minority, has strongly opposed advancing the entire exemptions list from the committee stage, citing irregularities with some listed companies and their respective requested amounts in tax exemptions.

    “The phenomenon of tax exemption as an avenue for corruption is a frightening development that threatens the domestic revenue reforms that the state is currently undertaking … The effect of these new taxes will result in the poor becoming poorer, suffocating industries and businesses and further increasing the hardships Ghanaians are already experiencing. This government is simply robbing Peter to pay Paul by exacting taxes from Ghanaians, only to dole out huge tax exemptions to their cronies for kickbacks. It is for this reason that we call on all Ghanaians to join us in this fight.”

    Meanwhile, the Majority Leader, Mr Alexander Afenyo-Markin, has also criticized the delays in the approval of the waivers as a deliberate move by the Minority to hinder the government’s efforts to attract investment into the country.

    Hon Afenyo-Markin accused that, the process has been impeded by extensive parliamentary delays, particularly due to demands for further deliberation and scrutiny by members of the Minority caucus.

    “The Minority also rejected a proposal to present 15 companies, deemed free of irregularities, to the floor of Parliament, leaving the Majority Leader visibly frustrated. While some arguments against presenting the list may have merit, the prolonged delay—now in its fourth year—raises concerns about an intentional effort to obstruct the government’s agenda.”

    The 1D1F initiative aims to transform Ghana’s economy from one reliant on raw material imports and exports to a manufacturing and value-added export economy.

    This private sector-led initiative involves government support to enable businesses to secure funding and additional assistance from government agencies to establish factories.

    This initiative aimed to signal to the international investor community that Ghana is a favourable environment for business, thus boosting economic contributions.

    These exemptions are designed to reduce operational costs, making it more attractive for businesses to establish and expand their operations.

    Without these incentives, affected companies may scale back their plans, leading to slower industrialization and fewer job opportunities, thereby undermining the 1D1F programme’s objectives.

    Moreover, the ongoing impasse could negatively affect investor confidence in Ghana.

    The perception of political gridlock and uncertainty surrounding the tax exemption process may deter potential investors, who fear similar bureaucratic hurdles and a lack of policy consistency in the future.

    It is imperative for Parliament to leverage its unique numerical composition to foster strong bipartisan relations for the benefit of Ghana.

    Healthy bipartisan collaborations invariably create more stable environments that favour businesses, irrespective of the government in power.

    Ensuring the timely approval of these tax exemptions could enhance Ghana’s industrialization efforts and signal to the global investor community that the country is committed to creating a conducive business environment.

    As the situation unfolds, the focus remains on whether Parliament can resolve these delays and move forward with the necessary approvals to support the 1D1F programme and the broader economic goals of the nation.

  • NDC to develop a framework to guide appointment of parliamentary leadership

    Adnan Adams Mohammed

     

    As part of the resolution by the Council of Elders of the National Democratic Congress (NDC), the national executive committee has been directed to as a matter of urgency, accelerate work on the draft framework of rules for to guide decisions relating to matters such as the appointment of parliamentary leadership of the party.

     

    This comes after series of meetings the Council had on a petition submitted by a group of NDC Members of Parliament on the recent changes to the party’s Parliamentary leadership announced earlier by the Party Leadership.

     

    The Council assured that, it will ensure that this framework is in place within the shortest possible time.

     

    “Indeed, the NDC party must not and will never forget the contributions of our three respected comrades in improving the electoral fortunes of the party”, a press statement signed by the chairman, Alhaji Mahama Iddrissu said.

     

     

    FULL PRESS STATEMENT

     

    For Immediate Release:

    6th February, 2023.

     

    NDC COUNCIL OF ELDERS AMICABLY RESOLVES IMPASSE OVER APPOINTMENT OF NEW LEADERSHIP OF MINORITY CAUCUS.

     

    Over the past several days, the Council of Elders of the National Democratic Congress (NDC) has been holding a series of meetings on a petition submitted by a group of NDC Members of Parliament on the changes to the party’s Parliamentary leadership announced earlier by the Party Leadership.

     

    The Council approached the engagements conscious of the need for an early resolution which will be in the best interest of the party and mindful of the imperatives of unity and cohesion at a time Ghanaians are looking up to the NDC to rescue the country from the dismal state of affairs which has been the hallmark of the Akufo-Addo/Bawumia/NPP government.

     

    While recognizing that the party leadership was within its rights to make appointments or rotate the leadership of the NDC caucus in Parliament as has been the case since the inception of the Parliament of the 4th Republic, the Council is of the view that the processes need to be improved. Accordingly, the Council noted that in the instant case, the approach, level of consultation, timing as well as the mode and manner of notifying the affected persons could have been better.

     

    That notwithstanding, the Council implored our Honorable MPs to accept the decision of the party leadership and work with the newly appointed leadership of the caucus. This position was discussed with representatives of the petitioners who fully appreciated the stance of Council and offered to communicate same to the petitioners.

     

    The Council has advised the leadership of the party to as a matter of urgency, accelerate work on the draft framework of rules for to guide decisions relating to matters such as the appointment of parliamentary leadership of the party. The Council will ensure that this framework is in place within the shortest possible time.

     

    The Council regrets the media altercations that took place in the aftermath of the leadership changes and the failure of the protagonists to resort to the internal grievance resolution mechanisms of the party to address their concerns. The Council is of the hope that such political point-scoring which is not part of our political ethos will be avoided in future. All concerned parties have accepted the Council’s advice and pledged to abide by it.

     

    The Council of Elders acknowledges the leadership and sterling achievements of the outgoing leaders of the NDC caucus namely, Hon. Haruna Iddrisu, Hon. James Klutse Avedzi and Hon. Mohammed Muntaka Mubarak who have raised the profile of the NDC minority caucus and demonstrated that indeed it is the NDC who has the men and women capable of turning the fortunes of Ghanaians around. Their efforts have contributed to reassuring Ghanaians that the NDC party is ready to assume power and rescue the nation from the depths of despair and desperation. Indeed, the NDC party must not and will never forget the contributions of our three respected comrades in improving the electoral fortunes of the party.

     

    The Council of Elders hereby calls for togetherness and unity of purpose within the minority caucus and urges all members of the party to let peace prevail. Let us not do anything to hamper the clear opportunity the NDC has to emerge victorious in the 2024 elections.

     

    It is our hope that the new Minority Caucus leadership will provide the leadership that will guarantee a resounding victory for the NDC in the 2024 general elections so that we can together rescue our beloved country from the hands of the failed Akufo-Addo/Bawumia/NPP government.

     

    Signed.

    Alhaji Mahama Iddrissu

    (Chairman, Council of Elders)