Q & A with CEO of GIPC – Mawuena Trebarh

Mrs Mawuena Trebarh was appointed CEO of the Ghana Investment Promotion Centre (GIPC), by the President of Ghana, John Mahama in 2013.

The GIPC is the institution mandated with the registration of all investments into the country; both domestic and foreign.

Mrs Mawuena Trebarh holds a B.Sc. in Geology & Mining from the University of Jos, Nigeria and an MBA from Bentley College's McCallum Graduate School of Business, in Massachusetts, USA.

In this interview, Mrs Trebarh explains to Citi Business News the performance of investments in the country and addresses some concerns raised over the security of investments.

She also highlights the GIPC's role in the granting of tax concessions to businesses making huge investments in the Ghanaian economy.

Citi Business News: How is Ghana doing so far as an investment destination?

Mawuena Trebah: Well I think obviously when you are talking about investment promotion you have to situate it in the global context first. And as you know, in general, FDI inflows across the board have declined by about 16% as of 2015. Having said that however, we also need to look at what we have been targeting as a country and I think the first measure of accessing our performance will probably be the Africa competitiveness report of 2015. On that score, Ghana ranked 111 versus our coast compatriots from Ivory Coast 115, versus Nigeria which had 127. So comparatively if you look within the West African context, we are trying to ensure that within the continental scope, Ghana is still seen as an interesting place to do business and on average over the last four year period, we have been in excess of USD4 billion per annum.

I think that what accounts for sustaining the level of FDI's are two things. First of all our ability to attract interest from the domestic community because those are the people who are the true ambassadors of investment opportunities in the country.

As a centre it's been very important for us to reach out to the Ghanaian business community and know about the investment opportunities, be aware of the services that we can offer and that of course then allows us to attract interest from the international business communities.

Institutes like the Miklin Institute for accessing global opportunity have ranked Ghana as 77, versus Ivory Coast which is 116, versus Nigeria which is 118. So again looking within that context we do look good and of course we have other things going for us, peace and political stability which remain number one for every investor and especially because Africa has become such an exciting growth pole. It's important that we showcase the things that differentiate Ghana from other countries. So yes, that is very exciting and obviously we are pleased to continue to see that progress. But it is important to still look further at other areas in which we can create more efficiency and sustain continued interest in investing.

Citi Business News: It is interesting you spoke about the peace and stability which we use to tout our achievements and also push the investment destination agenda for Ghana. Recently we had two GITMO prisoners coming into Ghana and a lot of people said that may affect our investment agenda because it wouldn't push the safety agenda properly, don't you think that move will affect our investment agenda?

Mawuena Trebah: We always have to look at the statistics and be very dispassionate when we are assessing any decision, whether it is political or non political. For us at GIPC, we only have the numbers that tell us about the quality of inbound delegation that are coming into the country. It is important to highlight here that when you find inbound delegations, about average 25 business people, what that indicates is that a great deal of work has been done for people to purchase tickets and fly all the way to this side of the Atlantic to come and look at specific investment opportunities.

Delegation after delegation, we have hosted the French, the Turks, we have had delegation coming from England back to back. That is because we were able to showcase specific investment opportunities.

Statistically like I said, we have registered about 39projects in the first quarter of this year and they are estimated at about USD248million. If you think about that also in the context of initial capital that has already been put into those investments, so we are talking about 411.4million. Those sorts of increases demonstrate that there is continued interest in investing in Ghana. The business community, both domestic and international still sees this country as a safe place to do business and so it is the statistics that inform the rest of the things that we have to do. So yes of course there are various decisions that government will take but we look at it in the context of the numbers and that suggests to us that Ghana is still seen as a very safe place to do business.

Citi Business News: Recently, there have been a lot of talks about Ghana and the Ivory Coast. There have also been reports that quite a number of companies including local and foreign companies are relocating to Ivory Coast because of the economic challenges in Ghana, the tax regime, etc.

Now you have the statistics, you know who is going out and who is coming in, in terms of investments. What are the statistics saying, are people actually relocating to Ivory Coast be it local or foreign because of these challenges?

Mawuena Trebah: Let me explain in the legislation; every business that sets up in the country is required by law to register with the GIPC. But beyond the registration there is the monitoring and evaluation team. They are required to follow through with the investors so it's not just a matter of registering and then you go off and do something else.

So it is the statistics from our monitoring and evaluation team including what the business communities sends to us again by law. Every quarter they are required to report to us on how they are progressing with their investments. None of our statistics show that any of the companies' that we registered have relocated or have left the country.

Obviously the benefit of having monitoring and evaluation institutionalized in our operations is that we are able to track carefully the issues that companies are facing and we are able to be very hands on in working with them through the challenges and that is not to discount the reality that there are challenges.

Everybody agrees we have had issues with power, we have had issues with access to utilityand therehave been a number of challenges with land access. But these are not new issues. Our job as a center is to make sure that we can facilitate the process and make it easier and work very closely with our sister institutions. So you will see that institutions like the Registrar General's Department, the Ghana Revenue Authority and various investment promoting related agencies are all introducing new technologies to try and create more efficiency. We as a center are also trying to work very hard on setting up our one stop shop so that it makes things easier for the business community.

Even as they are challenged to deal with some of the issues that have prevailed not just within the Ghanaian context but globally. So our records haven't shown anything of that sort but I think we are also quick to recognize that there is a tremendous amount of work that goes into monitoring and evaluating to ensure that even if people do have issues, we are able to support them to overcome them.

Citi Business News: The Trade Minister, Dr Ekow Spio Garbrah recently announced, that a number of Chinese companies have been in talks with government into relocating to Ghana because they feel they will have much better access to raw materials, etc but there are two schools of thought over this development. One saying that it is not a good idea for us because the Chinese are really taking over. The other say that well this is a great idea we need to take advantage of it. What is in place to ensure that local companies take advantage of this development?

Mawuena Trebah: There are two things we will think about. First and foremost is obviously what factors into our national development agenda and therefore in attracting investment whether they are Chinese, American, etc how will those investments support us to create more jobs to introduce new technologies. If the Chinese happens to be best in class in a particular area, obviously like everyone else, they would be expected to abide by the laws that govern investments. So the first thing we will do is to showcase the opportunities not just to the Chinese investment company but also to the Ghanaian investment committee.

One of the things we have been very big on this year and last year as well was encouraging the domestic business community to prepare for opportunities for Joint venture partnerships. So taking advantage of the interest that the ancient business community and I always hasten to say it is not just the Chinese because like I told you we are taking a very strategic view of how we should target investments.

We don't want every kind of investor and I'm very sincere and open about this. There are investors that his Excellency President Mahama calls cowboy investors, they kick up a lot of dust, they make a lot of noise but nothing actually happens. We are looking at people for instance if you are talking about ports facilities. Everybody knows that the Singaporeans' have exceptional expertise in an area. They are from the Asian continent so we would target them and the result has been that is, Singapore opening up office here in Ghana so that Singaporean businesses can come into the country and look at some of the opportunities.

The trade ministry through the minister would have targeted the Chinese business community for some specific investment opportunities. Everyone knows that they have had great success in the manufacturing space. Now we are obviously interested in supporting investment in the manufacturing space because it creates a quality set of jobs for our young people. So the idea and the premise is to look at sustainable impact investment and obviously it is very much a team effort so our role would be to look at the Ghanaian business community, invite them to interact with the Chinese business community if there is attention on the possibility on some Joint venture partnerships. I think we can also leverage the strength frankly in our legislation so you don't get to do whatever you want.

Inevitably, we have the opportunity to demonstrate Ghana's strength in compliance with our legislations. So you will see some of the repercussions that have occurred for non-compliance and it is not just the Chinese and that is why I say for the investment promotion schedule officer, the focus is on who is best in class and what sort of development indicators can we see achieved and obviously we will continue to leverage that.

We work closely with various ministries and othergovernment agencies, the Ghana Export Promotion Authority, Free Zones Board are particularly important in partnering when such investments are being attracted into the country and obviously our various businesses and associations. I think it's quite exciting to see the level of competition if you will from different parts of the world for some of the investment opportunities in the country. What we need to do is to ensure that they understand what the laws say are required of them, they understand the implications for non-compliance and they also understand that there are actually exceptional Ghanaian business men and business women who they can potentially partner with and those are the opportunities that I believe as an investment promotion centre we will continue to support.

Citi Business News: Let's look at the challenges or the difficulties we are likely to encounter when the Chinese relocate here?

Mawuena Trebah:  Arming the Chinese business community with the reality that yes we do want strategic investments, but we expect that those investments will create jobs, will give us the opportunity for more auxiliary jobs. Making that clear in the beginning is extremely important and I think being able to demonstrate that there are a number of success stories. Companies that have come in that have registered properly, that are compliant from an environmental perspective. Which is why if you look at some of the processes around our approvals for licensing and permitting for strategic investors status, all of the different agencies, the EPA, the tax policy unit at the Ministry of Finance, the various permitting agencies within the GRA and customs, they all come together, work with us on reviewing applications.

So just because an investor comes to us and says we would like to invest 50million dollars and above, the money is not enough. We have to look at the environmental impact; we need to be sure that all of the permitting requirements have been met. We want to ensure that they are commercially viable, but if we want the investment to be sustainable, we have to ensure that it also has an economic import and so I think making sure that the business community, both international and domestic because lets also not forget that many times some international business players will have the tendency of being inclined to consider noncompliance only because they have a Ghanaian partner who has given them the impression that there are no repercussions. So sometimes it's not just the foreign investor who comes here thinking they can do what they want, unfortunately, there has been several instances in various sectors where you have Ghanaians who don't support adherence to compliance. So I think it is a two way street, making sure that we educate and arm our own business community with enough information so as they are approaching people for business, they also understand we know the opportunities, we are interested in taking advantage of the opportunities but we also know that this is what Ghana expects and I don't think that we need to be reserved or shy as a country about speaking to that requirement for development. I also think we will find a healthy balance as we continue to consolidate all of the different interventions that are required so there will be different controls, if you will. There will be different systems and processes and procedures by which the international investor will find that well if I for instance want an immigration status, I will have to come to the GIPC because the immigration service at GIPC has a partnership and a collaboration.

We communicate electronically so there is compliance on that score. If you are a Chinese investor you already know that you have to register with the GIPC and you can't go and do anything that is not compliant with the immigration service because of that partnership and collaboration. I think that those working relationships are becoming stronger, as I said, so when it comes to issues around companies taking advantage or international investors taking advantage, I have always said the law will evolve and more and more controls will come in place to suite our economic paradigm. So the question is not really on whether or not there is corruption or whether or not people will do the wrong thing. Of course they will but overtime as we have seen in other dispensations, the laws and the controls will become stronger and more robust. I'm sure no one will doubt the reality that we have one of the most prolific and vibrant parliament within the sub region and there is constant discourse about ways in which we can reinforce and strengthen our legislation and obviously the compliance that is required. So from an investment standpoint, we are interested in attracting the right sort of investor but we make it clear what is required of you in terms of compliance and obviously our monitoring function will also help to ensure that where there are difficulties, people can be set on the right path or handed over to the relevant authorities if they choose a path of non-compliance.

Citi Business News:  Some indigenous companies are not happy with the GIPC over the control of  foreigners in certain areas in business. For example in the retail markets, what would you say to such persons about ensuring that we don't see foreign businesses at places meant for Ghanaians?

Mawuena Trebah: Well I think we have been very clear several times. We will always take the side of the law and the law does not permit foreign entities to operate within our retail space. I think there are a number of administrative challenges quite honestly we have to address to create additional clarity because the issues have always been with what constitutes the market space, that retail space. There are lists that have come from some of the ministries; there are some that have come from the metro assemblies. That clarity needs to be reinforced so that when it comes to compliance, it is easy to say, just because a Ghanaian is operating in this space doesn't necessarily make it a market. These are the areas that have been designated as retail spaces for Ghanaians exclusively. That is a challenge we as Ghanaians will have to resolve. Having said that, I think that when you look at what we are trying to achieve by supporting the smaller and micro businesses to grow, develop and support the smaller economies that are so fundamental to our economic growth, it is important that we also give them context so they understand that we really are interested and engaged. So as a center, if we receive any queries, issues, concerns, recently we received some concerns that came from the Association of fishing gear distributors at Cow-lane so immediately the monitoring team went out and we formally communicated back to them our findings.

There were a few companies that we found were not compliant in terms of reregistration with the GIPC but they had the right number of Ghanaians hired, the right number of expatriates that had been allocated. The issue again was with whether or not the areas they were operating had actually been properly defined by the Metro Assemblies and backed up by our policies. So we have communicated back to them and obviously shared that input with the trade ministry who will lead with oversight for a team of task force that are regularly called upon to investigate issues.

Having said that there is also the reality that we do have some Ghanaians who unfortunately will front for someone who is not Ghanaian and operating in that space and that is also an issue that we need to address with our business associations.

I am very confident that as the law continues to evolve, we as GIPC will continue to look at our legislation that allows us to take more stringent measures against non-compliance of our legislation. So we have approached the Attorney General's office and asked for support to put in place some clauses that will low us to prosecute for non-compliance in certain areas of our law that will also support the domestic business communities that have issues with the retail trade. But I will always maintain and I think as a center we have recognized a huge team effort. We really need the support of the retail industry to bring to our attention areas or issues of concern. But we also must make sure that there are areas that we can clearly state this is non-compliance with our legislation and so perhaps coming together collectively with direction and support perhaps from the Ministry of Trade and Industry will come to a place where some of these issues will already be entrenched in the legislation and become a thing of the past. But clearly the retail industry is one that I think will continue to thrive. We will probably get the equation right when researching about what constitutes a market space and that is a collective decision.

Citi Business News: So when do you intend to be done with the Attorney General's bit and start cracking the whip?

Mawuena Trebah: Well it is a process and the Attorney General's office is going to communicate it back to us some of the next steps we will have to take. Probably not looking at anything earlier than the first quarter of 2017 at best because there is so much consultation that has to take place and there are several issues that have to be clarified, particularly with the Metropolitan Assembly so that when action is being taken, it is action that we can defend, it is also action that doesn't cause us to contravene various international trade agreements that we have signed up to as a country so there are quite a number of things to take into consideration. But the legal team is working pretty hard around the clock to make sure that we can add a little bit more strength to what we do.

Citi Business News: Let's go to issues of taxes. Local businesses say there are so many tax exemptions for foreign companies. They get all the exemptions and they get basically nothing. Most people say that these tax exemptions have done really nothing for us. We have just given out to the foreigners and in the end we are not benefitting as much as we should. First of all, how well have these tax incentives helped the country in terms of investments and returns in value?

Mawuena Trebah: I think for the subject of tax in general, we should look at what we are trying to achieve as a country. First and foremost I will immediately clarify that whatever exemptions, incentives, guarantees are available to the international business community are also available to the Ghanaian business community. That is why I hastened to say one of the big aspect of our work in the last twenty four months has been going around educating the domestic business community because they really are as we found, do not know that they are entitled to those exemptions. You register with the GIPC, you are a legitimate operating company. Of course if you put in applications, you are entitled to support to enjoy exemptions that will help to advance your business. So that point needs to be made quite clear right from the beginning.

The second thing to keep in mind is that exemptions in and of themselves are not bad, how we choose to implement them as a country perhaps is where we want to put more focus. The reality is that when you look at the kinds of strategic projects that we have brought into the country overtime, whether they are agricultural related. Movenpik Ambassador Hotel, West Hills mall, the Octagon, there are Ghanaian companies like Effah pharmaceuticals and all of these companies have taken advantage of the exemptions regime that is offered within the GIPC legislation.

I think what we must take a look at is centralizing the frame work and this is a conversation that we have had with the Ministry of Finance. I believe the IMF raised some of these conversations; some studies have also been done. It is our ability to centralize the process by which exemptions are given so that the Finance Minister rightly is able to track all exemptions and justify appropriately what is accruing back to the country as a result of offering those exemptions.

The reality is that right now, there are quite a number of different agencies and institutions that are offering exemptions and I'm not sure of the process by which every single institution arrive at a decision to recommend exemptions.  I can tell you about what happens at the GIPC. It is intense and it is rigorous. You put in an application for exemptions of any kind. The first thing is to refer you back to the existing tax code because there are quite a number benefits that are available within our existing tax legislation. If however you find that what is there is inadequate, you have a big investment, it's going to be over in an extended period of time, you are at liberty to put in an application. That application will come to the GIPC. Then you've got about eleven entities that will sit not just GIPC alone and look at the substance of the application; is it going to create jobs, is it going to allow us to introduce new technology, what are the social implications of that investment? So you've got the Ministry of Finance,  you've got the Bank of Ghana, the Ghana Revenue Authority, the Environmental Protection Agency, Ports and Harbors Authority, the Registrar General's Department, and the list goes on and on so it's just not a GIPC decision, it's very much a collective decision that we have accessed this investment proposal and we are clear. We have the tax policy unit at the Ministry of Finance plus the GRA come and do an assessment. If we waive these taxes at this time and this company immediately kicks into profitability, how much are we going to be receiving back as a country?

It makes sense to offer these exemptions to these companies. And that is a premise on which a lot of these infrastructure that I mentioned earlier in pharmaceuticals and tourism and so on,have come to stay and it is serving the country well.

As I said, the position that has been taken and I think it is the right position by the Ministry of Finance is that we need to ensure that we can account for every exemption that is offered. What is coming back into the country, we are very much a part of that discourse. I certainly think that as we continue to see the benefits of the investments that we need in tourism, if we are going to make tourism a major contributor to our economic growth, most certainly the infrastructure will acquire certain kinds of exemptions. The rigor with which we look at it and the dedication with which not just that committee of technical experts, it then comes to our GIPC board where you have again policy and then private sector representation also accessing it before they make concurrent recommendations to the presidency and to the Finance Ministry before it gets its final approval.

I think that is a level of rigor that every Ghanaian should be confident will allow us to deliver investments that have come with certain exemptions but in the medium to long term benefit the country and these are some of the things that we have to look at holistically as we take decisions about our exemptions regime.

So yes of course I mean there are all sorts of conversations about the taxes and the number of taxes and we don't shy away from that. I am certain that the Ministry of Finance is looking at ways in which they can continue to broaden the tax net so that there is more equity in distribution of the various tax obligations that companies at all levels of the economy are required to commit to but at the same time we don't discourage and push away big institutional investors who have the potential to partner with us as a country and I think there will be a lot of circumspection in whatever the final decision is but I think everyone sees the benefit of having exemptions.

Citi Business News: But do you share in the IMF's view that we need to cut majority of the exemptions because they are not serving us anything?

Mawuena Trebah: I think that our position is clear. It is not exemptions in and of themselves, it is how the exemptions are been offered, whom they are being offered to and our ability to demonstrate and prove that for every single exemption that is being offered, we know what is accrued back to the country. Our statistics are there. Every time we offer exemptions to any company of any kind, the Ministry of Finance is aware of it they are able to track it, customs have their own system so you've got GCNet as well. So there are a number of reporting controls so you can see for yourself we offered this company five year tax exemptions, they are now generating 'X' billion in revenue which are accruing back to the state in the form of tax obligation so there is the proof right there.

I think that the Ministry of Finance and quite rightly government and Ghanaians in general want to be sure that that level of rigor applies in every single instant. We don't think that as GIPC, getting rid of exemptions is the right solution because the reality is that it remains a very powerful tool. We have talked about the competitiveness within the West African and maybe African context but as we slowly progress towards regional integration, actually, the exemptions regime are going to be very important for the choices that the business community will make both domestic and international and that will probably be the tipping point as has often been the case in other dispensations if you look at places like Malaysia and Singapore. It is just the reality but they have been successful because they are able to track carefully what is offered to the business community and therefore what is coming back.

So the issue is not with exemptions, they are not bad but we must make sure they work for us just as they have worked for other places in the world. I think that is something that as I said, under the direction of the Ministry of Finance we are part of that conversation to agree on the appropriate framework to centralize issuance of exemptions.

Citi Business News: Still on the issue of taxes, to the extent that we recently saw parliament approve a tax waver of eight hundred and ninety two million dollars I believe out of a project that will cost 1.5 billion dollars, that's the Tema Port expansion project.

They gave a tax waver of about 892 million cedis to Meridian ports and services. People say of course we going to get 1,500 jobs created, in the end we will have the facility, the infrastructure but why should we give a waiver of almost two thirds of that project to a single entity? They are not happy about how or the amount of waivers that we give.

Mawuena Trebah: Again I think you have to take all of the statistical evidence into account before you take a decision whether that is excessive or not. I can't say that I am readily aware of all the data analysis that was done in concluding that that level of exemption was appropriate. I can however say that when you look at infrastructure like port facilities and you look at the potential that Ghana has, perhaps we need to do that analysis to be fully aware from the perspective of the GRA who are quite strict about generating revenues from taxes. What would have informed that recommendation to the Ministry of Finance? I can only propose that if you juxtapose what we are trying to achieve positioning ourselves as a hub into West Africa, one of the smart things to do is to speed up the process with which you create efficiencies within your port systems.

There is tremendous pressure on the existing port facilities in Tema. If you think about it in the maintenance facilities for ports, if you think about it in the context of goods and services coming into the country and then reaching out to the sub region, there are areas in which significant taxes could be generated from a very highly efficient finely tuned well operated port facility and that probably would have informed the decision that those exemptions were appropriate.

I'm pretty sure just looking at the agency in question and knowing our experience with GRA that they would have done quite a number of careful  analysis and it's not just projections that are for the next eighteen months or even twenty four months. As I said investment promotion is about five, ten, fifteen, twenty years from now, where do we want to be? Where do we want to see Ghana's port facilities and where do we want them to be positioned in the rest of the continental and global context?

So the investment that is being made now which is Ghana's investment in offering those exemptions is because of what we are trying to achieve from a long term development standpoint. I'm juxtaposing and making projections because as I said, I can't say I have all of the information but for those who are concerned about things like that I think the GRA is quite an open organization, we as GIPC ae also quite open if there are genuine concerns and I think they are genuine concerns, we are always available to do the analysis and share some more of the statistics.

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By:  Citibusinessnews.com/Ghana