Free Zones Living The West African Gateway Dream

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The Free Zones Programme is an institutional framework that allows businesses to locate their companies in Ghana to manufacture and process for export. It seeks to transform Ghana into the GATEWAY TO WEST AFRICA by creating an attractive and conducive business environment for the provision and enhancement of domestic and foreign investment.

The programme was conceived to help promote enterprise development, job creation thereby contributing to economic growth and development. The Ghana Free Zones Board takes its mandate from the Free Zones Act 1995, Act 504 of the Parliament of Ghana.

The main idea of establishing the Free Zones is to develop Ghana into a hub for manufacturing and processing through value addition for export. The Free Zones is the primary agent for industrial development in Ghana. The Programme focuses on development through exports, to encourage investors both local and foreign to produce goods and services for export-oriented development. Through this, Ghana can gradually, move away from an exporter of raw materials to an exporter of value added goods and services to enable her compete keenly with other emerging economies to have an entrenched position in the global marketplace.

Ghana’s Free Zones program is a key component of the country’s efforts to increase its capacity and revenues from non- traditional exports. It is also a very successful one, indeed creating a model which other liberalized African economies have sought to replicate.

The board offers a number of incentives to investors.
• 100% exemption from payment of direct and indirect duties and levies on all imports for production
• 100% exemption from payment of income tax on profits for 10 years and shall not exceed 8% thereafter.
• Relief from double taxation for foreign investors and employers
• 100% ownership of shares by any investor, foreign or local in a free zone enterprise is allowed.
• Minimum customs formalities
• Repatriation of profits
• Duty-free imports of equipments for manufacturing
• Exemptions from withholding taxes on dividends from investments in the free zones.

In return for these generous benefits, companies are required to export at least 70% of their total production, and not more than 30% can be sold in Ghana. The scheme also allows for 100% ownership of shares by any investor, foreign investors inclusive and companies with free zones status have unlimited expatriate quota. There is no minimum capital investment requirement.

Free zone companies contribute substantially to the national economy. The board has achieved significant successes since the inception of the free zone programme in Ghana. Contributions from 1995, to the end of the 2nd quarter of 2014 include:
• Total Capital Invested US$35bn
• Total Export US$37bn
• Employment 31,005
• Tax and duties on local sales $140m
• 1% of total annual salary/wage $20m
bill of Free Zone Companies spent on training Ghanaian nationals employed in the companies
• Social Security $123.6m
• Income Tax $125.6m

In total, around one-third of registered free zones companies in Ghana are owned by foreign entities, one-third is locally owned while one-third are joint ventures between foreign and local ventures. Free zone companies are also providing indirect employment to artisans. A large number of skilled and unskilled labours such as masons, plumbers and welders have been employed for construction of the factories. Local companies are also getting sub-contracts for the supply of packaging materials, raw materials and spare parts for machines as well as cleaning services.

The inflow of foreign firms into the free zones has also enhanced the managerial and technical expertise of Ghanaians, created opportunities for the Ghanaian labour force to foster skills development. The GFZB regulations require that free zone enterprises spend up to 1% of their total wage bill on training of local staff for continuous improvement in business processes and to ensure Total Quality Management (TQM).
Manufacturing and agricultural processing companies account for the majority of activities within the Free Zones. Majority of the companies are into agro-processing-cocoa, fruits and other agricultural products including salt, cashew and shea nuts. Other manufacturing firms produce or process plastics, furniture, DVDs, food processing equipments, textiles, carbonized briquettes, vacuum bags, pharmaceuticals, mineral (including gold), cotton, marble files and electrical cables among other items.

Much as the government is striving to revamp local industries to boost manufacturing for both local and export markets, The Free Zones Board is working assiduously to attract investment to produce more goods and services for export. By exporting, Ghana would generate a lot of foreign exchange to help offset her trade deficits, create jobs for the unemployed, enhance standards of living and improve the entrepreneurial skills of the Ghanaian workforce. One sure way to continue strengthening the economy is to minimize importation of products which can be produced locally and strive to add value to our raw materials for export.

The Minister of Trade and Industry, Dr. Ekwow Spio Garbrah, has continued the sensitisation and education his predecessors, Honourable Hanna Serwaa Tetteh and Honourable Haruna Idrissu had started. Their collective call has been to urge Ghanaians to discard their penchant for imported or foreign products and believe in “Made in Ghana” products. Honourable Spio Garbrah , an ardent believer in made in Ghana Products, has said that it is important for all Ghanaians to know that the nation stands to benefit immensely if the citizenry patronise locally manufactured goods. Ghanaians, he said, must realise that patronising locally manufactured products would create employment for Ghanaians as well as help balance Ghana’s trade deficits thereby accelerating economic development.

Besides, manufacturers must set standards and produce goods that would resonate with customers’ tastes and preferences. This, he emphasised can only be possible through technology and continuous improvement in the value chain to ensure total quality management. These measures would increase patronage to cut down on imports to make Ghanaian manufacturers competitive both locally and globally

The Executive Secretary of the GFZB, Mr. Kwadwo Twum Boafo has said that Ghana is open for business and the preferred investment destination is for enterprise in West Africa. It is a favourable destination, he reiterated, explaining that Ghana has a policy of not expropriating investments which make investments safe in the country.

He also sought to clear the misconception that the Free Zones programme has been designed solely for foreign investors. To set the records straight, there are many Ghanaians operating flourishing enterprises within the Free Zones. In fact, up to 47% of the investments in Ghana’s Free Zones programme are Ghanaian-owned, whilst some of them have gone into partnerships with foreign entities. He added that to the extent that the nation through the free zones programme is striving to attract foreign investments into the country, Ghanaian entrepreneurs and local manufacturing companies have to be encouraged to take up the mantle of production and value addition to create additional employment for Ghanaians to accelerate the development agenda.

INAUGURATION OF MOTICOMM
The Minister of Trade and Industry Honourable Ekwow Spio Garbrah inaugurated MOTICOMM, the only existing group of Public Relations/Communications Executives of the various agencies under the Ministry. The agencies included:
• Ghana Free Zones Board
• Ghana Export Promotion Authority
• Export Development & Agricultural Investment Fund
• GRATIS Foundation
• Rural Enterprises Programme
• National Board for Small Scale Industries
• Ghana Investment Promotion Centre
• Ghana Standards Authority
• Private Enterprise Federation
• Ghana Trade Fair Authority
The aim of bringing the PR Executives together was to among others:
• Synchronise and harmonise the respective programmes of the Agencies
• Consolidate the efforts of the agencies
• Improve on the agencies’ approach to work
• Define, distribute and control messages to both internal and external audiences
• Interact with the general public to access various services with ease
• Deepen integration among the various agencies
• Maintain a positive public image to increase confidence and instil trust
• Enhance collectively the performances of the agencies

THE EXPORT PROCESSING ZONES
The GFZB technically operates four free zone enclaves, one of which is the Tema Export Processing Zone (TEPZ) –the main Flagship. Indeed by the end of 2010, 24 of the total 194 free zone enterprises operated within TEPZ. Currently there are 29 companies operating within the Tema Enclave. The Free Zones programme does not restrict companies to compulsorily locate within its four enclaves (Shama, Sekondi, Ashanti Region and Tema). The whole of Ghana is accessible, giving the licensed free Zone companies the liberty to locate as Single Factory Enterprises wherever they deem economically viable within the peripheries of Ghana. The nation is endowed with rich natural resources evenly distributed in the ten regions and would therefore make economic sense to allow companies locate where to be close to their raw materials.

THE EXPORT PROCESSING ZONES
The Tema Export Processing Zone (TEPZ), with a total area of 1,200 acres (480 hectares), offers investors a favourable and conducive environment for manufacturing, service and commercial export activities. Business Processing is facilitated by the deliberate convergence of all front line export/investment promotion institutions such as Customs Excise and Preventive Service, Police, Immigration, Environmental Protection Agency, Internal Revenue Service and so forth into a one-stop-shop.

The Tema Free Zone enclave is also linked to the airport and seaport by a first class road network. It is largely developed into a multipurpose industrial park to enable non-free zone investors to have access to the industrial site and superior services so as to boost their productive capacities

The Tema EPZ is well serviced with the following off site facilities:
• A dedicated electrical power grid
• Large water reservoir constructed to ensure the constant supply of water
• Central Sewerage System
• Telecommunication Services
• Securitized enclosures

SEKONDI EXPORT PROCESSING ZONE
The GFZB has 2200 acres of industrial enclave in the Western Region of Ghana, which is designated as the Sekondi Export Processing Zone EPZ). The proximity of the Sekondi EPZ to the country’s second seaport with a direct road link is ideal for heavy industrial activities.
Earmarked as a petrochemical hub as well, it provides a good location for manufacturers and dealers in the by-products and accessories produced by the downstream petrochemical industries which may not necessarily require a sea front property for their export- oriented operations. It is also ideal for investors who would be in the wood processing and furniture manufacturing business.

The GFZB seeks partners and strategic investors to work with it as enclave developers, independent power producers, natural and recycled water producers, and telephony and communication service providers.

ASHANTI TECHNOLOGY PARK
The Ashanti Technology Park (ATP) located in the Ashanti Region which is in the very centre of Ghana. The Ashanti Region has abundant resources, including most of Ghana’s rich cocoa plantations, gold reserves, timber plantations, leather producers, and tourist sites. The ATP occupies an area of 1099 acres.

The GFZB is positioned for partnership with investors interested in developing the Ashanti Technology Park. Participation can be through Joint ventures and sector specific infrastructure development.

The industrial sectors specially earmarked for this up-coming zone include:
• ICT/ Cyber Village
• Cocoa Processing
• Light Industrial manufacturing
• Heavy Industrial manufacturing
• Warehousing and logistics services
• Social Services Centre
• Bio-Technology development

The Ashanti Technology Park is to evolve into a multipurpose export processing zone where opportunities abound for investment in water production and distribution, electricity generation from thermal and bio-mass plants, telecommunications infrastructure and accessories manufacturing.

The GFZB is looking for investors interested in developing the Technology Park.

YABIW (SHAMA) LAND BANK
The Yabiw (Shama) Export Processing Zone (EPZ) is one of the Ghana Free Zones Board’s (GFZB) land banks. It is located in the Shama Ahanta East Metropolitan area in the Western Region of Ghana, where the country’s oil find is. The Western Region is therefore the hub of the oil and gas activities in Ghana. The Yabiw (Shama) EPZ is therefore designated as a petrochemical hub.

The GFZB will also earmark sections for tank farms, storage yards for logistics and haulage contractors, manufacturing of chemical inputs and accessories for the petroleum industry at very competitive prices.

It is the GFZB’s intention to sustain its participation in Ghana’s oil sector by licensing and monitoring growing businesses in all the downstream and support services segments and the Shama EPZ will serve as the ideal industrial zone for those operations.

BlackIvy LLC an investment company that builds and grows enterprises in sub-Saharan Africa, will soon be developing part of the Yabiw (Shama) landbank into an industrial hub to be called WestPark. BlackIvy LLC has an investment potential of $2bn in Port, Power, Rail and Gas Infrastructure for the Western Region.

SOME PROJECTS FOR 2015-PROSPECTS FROM INVESTMENT PROMOTION MISSIONS

THE BLACK IVY PROJECT
BlackIvy LLC is an investment company that builds and grows enterprises in sub-Saharan Africa-focusing in Ghana, Kenya, and Tanzania. We developed large-scale enterprises in logistics, real estate and consumer goods and services that will create jobs and unlock new sources of sustainable growth in emerging regions of our target countries.
Founded by Cheryl Mills, former counsellor and chief of staff at the U.S. State Department, Black Ivy has an experienced team of investment professional, operators, and experts. We are backed by an investor group of successful financiers and entrepreneurs, including Steve Case (founder of AOL), John Mack (former CEO of Morgan Stanley), Tony Welters (former Executive VP at United Health Group), and Continental Grain.

Members of BlackIvy’s team most recently developed a 600-acre industrial park in northern Haiti. Two years after the park opened in 2012, its first six tenants employ 4,000 people with available factory and office space fully leased.

BlackIvy’s WestPark is an upcoming Industrial Hub for Ghana’s Western Region with an investment potential of $2bn in Port, Power, Rail and Gas Infrastructure for Secondi-Takoradi

About Westpark
 400-acre industrial and office park due to open in 2016, offering 125 acres (net leasable area) of factory shells, warehouses, Class-A office buildings and serviced plots-with scope for future growth.
 Ideal for apparel, footwear, appliances, electronics, pharmaceuticals, packaging, furniture, building materials and processing of cocoa, palm oil, and rubber.
 Located in shama, in the heart of Ghana’s fertile, mineral-rich and well-connected Sekondi-Takoradi metro area, a base for the oil & gas industry.
 Leveraging the entrepreneurial acumen of Ghana’s people, natural assets, competitive labour force, stability and strategic location to emerge as one of West Africa’s most competitive industrial and trade hubs.

ADENYA POULTRY
Adenya poultry is designed to be a vertically integrated poultry project with its own hatchery, feed mill, processing facility and state of the art fully automated poultry houses with an estimated annual production level of 40,000 tonnes of poultry.

Ghana currently imports 77.6% of its poultry supply from other African countries and Europe. The demand for locally produced product represents a strong market opportunities for the expansion of local poultry production and a true marketing benefit for customers to proudly serve and offer Product of Ghana Poultry. The per capita consumption of poultry meat in Ghana has increased 333% since 2000 and is expected to more than double to 12.6 kilograms per capita by 2030. Currently, to feed the rising per capita demand, Ghana imports 100,000 tons of poultry annually. Consumers want and prefer to purchase locally produced product if it is available and affordable. Adenya Poultry Operations will make it much easier for businesses and Government Agencies to offer the people of Ghana the opportunity to purchase locally produced poultry products.

IMMINENT BENEFITS
• Community focused to build programs that enhance the everyday lives for the citizens of Ghana
• Consistent food source for Ghanaians
• Provision of high quality jobs for the surrounding areas
• Tremendous financial benefits for the indigenes
• Local and national development
• Improvement of infrastructure
• Improvement of the quality of Ghanaians

DIGNITY DTRT LIMITED
The company is engaged in manufacturing of apparel for export. Dignity DTRT Limited is to produce 32,900,000 pieces of T-Shirts and Polo Shirts with ex-factory value of US$36,095,000.00 during the first three years of operations. The company exports 100% of its produce to USA. Within the first three years of operation, Dignity DTRT Limited would employ 4,792 workers and the estimated total amount of capital for the project is US$ 1,742,093.40.

BPM
BPM is an upcoming plant for corrugated paper boxes for packaging (card board cartons) to be sited within the Free Zones. The rising demand for environmentally friendly products as well as consumers’ demand for recyclable and renewable packaging materials has necessitated this paper packaging plant. Packaging has a role to play in the value chain as well as the overall quality of finished products in all sectors of manufacturing. Ghana is home to a multitude of exporters made up of both local and foreign investors involved in the processing of cocoa and other agricultural products. The BPM Concept centres around the concept of manufacturing world class quality cardboard cartons for use by processors and exporters of agricultural produce located within the Ghana Free Zones. The project which aims to employ 45 people with a capital injection of US$ 2.5 Million will cater for breweries, pharmaceuticals, fast moving consumer goods, cosmetics and leather industries in ECOWAS and beyond.

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