Among the usual questions asked
are the following:
- How safe will my investment in Ghana will be?
- What guarantees do you have under the laws of Ghana
for protecting my investment?
- Will my company be allowed to transfer profits,
dividends and capital upon liquidation?
- What is your government's track record in expropriation?
- Do your government accord national and most favoured
nation treatment in any bilateral regimes between
Ghana and my country?
- Does Ghana have Bilateral Investment Promotion and
Protection Agreement and Double Taxation Agreement
with my country?
- Is your country a signatory to the MIGA Convention?
- Does your country have an Investment Incentive Agreement
with OPIC?
- What protection guarantees you have under national
law?
- What is your legal system? Is it similar to the
common law? Or civil law? Is it written law? Is it
modern?
- Does the government rule by military decrees?
- What protections do we have regarding our personal
safety as investors and as expatriate experts in Ghana?
- Can we depend on the country's judicial to handle
investment disputes in a fair and equitable manner
and in accordance with due process under law?
- What about delays in the courts?
How long does it take to settle a dispute in the court?
- Does government exercise control through golden-shares?
- Does Ghana offer you arbitration, mediation and
conciliation proceedings as alternative mechanisms
for dispute settlement in the courts?
- What is the level of government commitment to
the private sector?
The above questions read together define the concept
of investment security and also underscore the legitimate
fears of any foreign investor who is venturing into
the "unknown".
The following profile of Ghana in terms of her investment
security indicator would highlight some of the policies,
legislations and initiatives which are designed to ensure
investment security in Ghana.
Protection of Investors and Investments under the
1992 Constitution of Ghana
Ghana's 1992 Constitution, which is the basic framework
for the governance of the country offers guarantees
for protection to investors and their investments. Chapter
five of the Constitution embodies the relevant protection
mechanisms.
Protection of Investors under the Constitution
The 1992 Constitution, like all old and modern constitutions
worldwide, enshrines the fundamental human rights and
freedoms of "every person", which by implication,
includes "a foreign person" residing in Ghana.
The Constitution enjoins the Executive, the Legislature
and the Judiciary, including all organs and agencies
of government, to uphold the basic rights of all persons
within the territory of Ghana.
Basically, these guarantees relate to:-
- Protection of the right to life;
- Protection of personal liberty;
- Respect for human dignity;
- Protection from slavery and forced labour;
- Equality and freedom from discrimination;
- Protection of privacy of home and other property;
- Freedom of speech and expression;
- Freedom of thought, conscience, belief and religion;
and
- Freedom of movement.
These guarantees should be of interest to investors since
they migrate along with their families and with the requisite
expatriate workers to reside and work in Ghana as the
host country to the investment.
It must be noted that the foreign investor has a corresponding
obligation to respect all laws and regulations of the
country. This requirement is not only peculiar to Ghana
or Africa, for that matter; is a legitimate requirements
for residing in every country in the world.
Protection of Investment under the Constitution
With respect to protection of investments, Article 20
of the Constitution guarantees protection from deprivation
of property. Specifically, the Constitution states that
there shall be no compulsory acquisition of property which
by implication, includes "investment", except
where such compulsory acquisition is necessary for the
defense, public order, morality, health and benefit of
the country.
The Constitution further states that compulsory acquisition
must be made under law and in a transparent manner. More
importantly, compulsory acquisition of property must be
accompanied by prompt, fair and adequate compensation,
which is a basic obligation under international law adopted
by most Constitutions worldwide.
The implication of these Constitutional provisions are
that, any foreigner residing in Ghana can, on the basis
of the Constitution, claim protection for his property
(investment) and his person and can defend his investment
and his person in the law courts on the basis of these
Constitutional provisions.
These guarantees do not apply to Ghanaian nationals only.
Indeed, they apply to all persons who reside in Ghana
and to all persons who own and implement investment projects
within the territory of Ghana.
GUARANTEE
OF INVESTMENT PROTECTION AT THE LEVEL OF NATIONAL LAW
Under the Ghana Investment Promotion Centre Act 1994 (GIPC
ACT 478), investors are given concrete guarantees and
assurances in respect of their investments in Ghana. These
include:
- Unconditional transferability of dividends and net
profits to their home countries;
- Transferability of payments for loan servicing in
the case of foreign loans and royalties and other
fees in respect of technology transfer transactions
e.g. licenses technical assistance and management
contracts; and
- Remittances of proceeds in the event of sale and
liquidation of investment assets in the currency in
which the investment was originally made to their
home countries.
It must be noted, however, that all these transfers are
subject to the payment of all local taxes as is generally
the standard requirement in nearly all countries.
The GIPC Act also offers guarantees against expropriation.
Similar to the provisions in the Constitution, expropriation
is allowed only in the national interest and must be accompanied
by fair and adequate compensation. The aggrieved party
or the investor is given the right of access to the High
Court for the determination of the fair value of the investment
and the amount of compensation payable.
Dispute Settlement Guarantee
Beyond the protection guarantees offered, under the law,
Government also gives guarantees related to the settlement
of investment disputes in selected specified fora. In
essence, government is giving advance commitment to settle
all investment related disputes in an amicable manner,
through mutual discussions, and failing which the aggrieved
party (the investor) is given the right to request for
dispute settlement within the context of various frameworks
for dispute settlement provided at the bilateral and multilateral
levels. By this, government enhances the framework for
dispute settlement and, accordingly, allays the fears
of investment security in the minds of the foreign investor.
Among some of the fora specified are: -
- The Rules of procedure for arbitration of the United
Nations Commission on International Trade law or the
UNCITRAL Rules.
- Under the Convention of the International Center
for the Settlement of Investment Disputes (ICSID)
International Chamber of Commerce (ICC).
- Within the framework of the dispute settlement provisions
in any bilateral or multilateral agreements between
Ghana and the country of the aggrieved investor.
- Investment Protection Regimes at the Bilateral Level.
Bilateral Investment Promotion Treaties
(BITs)
Ghana offers further commitments at the bilateral level
to protect investors and their investments. Under these
bilateral regimes, government gives the right to the investor
to take government to arbitration in any of the selected
and pre-agreed dispute settlement fora. The implication
of this guarantee is that government has given its advance
commitment to appear as party to the dispute in the particular
forum to find a mutually agreeable resolution to the dispute.
Dispute settlement under BITs means that the initial dispute
between the host country of the investor is lifted to
the bilateral level and, therefore, becomes a dispute
between the state of the investor and the host country.
In other words, the investor's country adopts his "cause"
and steps into his shoes to ensure that he obtains justice
in the process. In such circumstances and subsequently,
to proceed against the expropriating state for a refund
of the amount paid. This is usually refereed to as the
'principle of subrogation'.
For purposes of handling issues related to foreign investors
and their investments in each others' territory in a non-discriminatory
manner, the State contracting parties, under BITs, undertake
to do so under various standards of treatment. These include:
national treatment, which is by reference to treatment
similar to that accorded to nationals of the host country;
most favoured nation treatment, which is by reference
to the standard of treatment not less favourable than
that accorded to nationals and investments of third countries
in similar circumstances; and treatment which is fair
and equitable which is derived from basic principles of
international law and a common shared sense of justice.
Bilateral Investment Treaties are unique in that they
are: between states but the subject of the agreements
and the direct beneficiaries are third parties i.e. investors
of the two state parties to the agreement who invest in
each other's territory.
Countries, both developed and developing, are increasingly
concluding Bilateral Investment Treaties (BITs), sometimes
referred to as Investment Promotion and Protection Agreement
(IPPAS) with interested Countries. The objective is to
protect and promote investments and to foster economic
co-operation with interested Countries. BITs signify a
strong commitment of the Contracting States to provide
a safe, predictable and stable legal framework to encourage
foreign direct investment and technology inflows into
each other's country and also contribute to the progressive
elimination of restrictions on the transfer of funds arising
from investment transactions. BITs encourage and commit
governments to ensure that all matters affecting investments
are handled in accordance with due processes of law.
As such, BITs represent a strong and positive signal to
the private sector operators that government will not
use the sheer power of the state to crush them in the
event of expropriation or an investment related dispute.
In furtherance of the investment promotion mandate given
under section 2 of the Ghana Investment Promotion Centre
Act 1994 (Act 478), the Ghana Investment Promotion Centre
is mandated to encourage and promote investments in the
Ghanaian economy through the negotiation of Bilateral
Investment Treaties with interested countries.
To date, Ghana has concluded over twenty one (21) BITS.
Some of the agreements have been ratified while others
are still awaiting ratification. The relevant Countries
include:-
The United Kingdom
The Kingdom of Denmark
The Federal Republic of Germany
The Peoples Republic of China
The Republic of Romania
The Republic of La Cote d' Ivoire
The Republic of Yugoslavia
The Republic of South Africa
The Republic of Mauritius
The Republic of Zambia
The United States of America (Signed with its Overseas
Private Investment Corporation (OPIC)
The Kingdom of The Netherlands
The Swiss Confederation
The Republic of Malaysia
The Republic of Egypt
The Republic of Bulgaria
The Republic of Cuba
The Republic of France
The Republic of Guinea
The Republic of Mauritania
Burkina Faso
If you reside in any of these countries, then you must
know that the Government of Ghana, by concluding BITs
with the Country in which you reside, has brought you
into the ambit of protection under the agreement. Accordingly,
the government of the country in which you reside should
accord you protection under the agreement as a 'national'
and where applicable as an 'investor'.
Convention
on Recognition and Enforcement of Foreign Arbitral Awards
Ghana is a signatory to the 1958 United Nations Convention
on the Recognition and Enforcement of Foreign Arbitral
Awards, commonly known as the "New York Convention".
The Convention permits arbitral awards made in countries
that have adopted the Convention to be recognized and
enforced in any contracting state, where the losing party
resides or where his property is located. By giving the
prevailing party, the right of enforcement of his claim
in several countries, the Convention further enhances
the dispute settlement mechanisms at both the national
and bilateral levels.
Double Taxation
Agreements (DTAs)
Ghana also uses the instrumentality of Double Taxation
Agreements to rationalize the tax obligations of investors
who come from global tax sourced jurisdictions with a
view to saving the affected investors from the incidence
of double taxation by both their home governments and
the host country. Ghana is committed to entering into
DTAs with interested countries with the ultimate objective
of freeing investment capital and thereby securing the
investment capital from being eroded by the effects of
taxation.
Protection regimes at the Multilateral
Level
Further to protection guarantees at the Bilateral level,
Ghana has also signed an investment Incentive Agreement
with Overseas Investment Corporation (OPIC) of the United
States and is also a signatory to the MIGA Convention.
OPIC offers investment insurance on a commercial basis
with the support of credit of the Untied States government.
OPIC may, in deserving cases, pay a claim to the investor
and pursue its subrogation rights with the host country
in accordance with the Investment Incentive Agreement
between OPIC and the host country.
The ECGD of the United Kingdom and NCM of the Netherlands,
owned by a consorting of Banks and insurance companies,
also offer similar investment insurance guarantees.
MIGA, a multilateral system for investment insurance against
selected political risks, such as expropriation and similar
measures, breach of contract, war and other civil disturbances,
offers investment guarantees against losses resulting
from restrictions imposed on currency transfers by the
host country.
GHANA'S LEGAL SYSTEM AND
ADJUDICATION PROCESSES
Ghana's legal system takes its root from the British common
law tradition and it is supplemented by various legislations
on specific issues. Accordingly, Ghana's legal system
has all the attributes and safeguards for the protection
of property and human freedom, all of which are inherent
attributes of the common law tradition.
The
Bar and the Judiciary
Ghana has a very formidable Bar comprising lawyers trained
in the common law tradition in both Ghanaian universities
and other institutions worldwide. This brings to the Bar,
some lawyers with knowledge and appreciation of the Civil
law tradition, which is the legal tradition of Europe
and other Countries whose legal systems follow the Napoleonic
tradition. The Bar is very sensitive about Human Rights
issues and has been active participants in the democratic
and development processes in the country.
Ghana's judiciary comprises very seasoned lawyers with
specialization in various areas of the law. They are singled
out for appointment to the judiciary on the basis of their
excellent performance at the Bar. Similar to the United
States Constitution and the British legal tradition, Ghana's
Constitution guarantees the independence of the judiciary.
Under the Constitution, the judiciary is subject only
to the Constitution and is, accordingly, insulated from
interference by the President and impliedly other members
of the Executive, the Legislature and other government
bodies and in the exercise of its administrative, financial
and judicial functions, it is not subject to the Control
of any authority. This protection mechanism is designed
to give the judiciary the freedom to handle cases in a
firm and fair manner devoid of political, racial, religious
or other considerations.
Government, under the Gateway project, has included the
judiciary among the group of front line institutions,
which have to be provided with the necessary infrastructural
support in order to improve their delivery and enable
them to function effectively.
The institution of the fast track court and the introduction
of Alternative Dispute Resolution Mechanisms such as arbitration,
mediation and conciliation (ADRS) within the Courts system
are all attempts to enhance the work of the judiciary
and to generate the necessary confidence in the legal
and judicial systems.
PRIVATE SECTOR
INITIATIVES FOR DISPUTE RESOLUTION
The Ghana Arbitration Centre
The first of its kind in West Africa, the Ghana Arbitration
Centre was established in October 1996 as a purely private
sector initiative by a group of lawyers, judges and other
professionals from various disciplines. It is fashioned
after other arbitration Centres in the United States,
Asia, London and Cairo, among others. It seeks to enhance
the dispute resolution process by offering alternate dispute
resolution mechanisms such as arbitration, mediation and
conciliation.
The Ghana Arbitration Centre (GAC) has been established
to reinforce the legal framework for protecting commercial
or economic interests and accordingly inspire the confidence
of the prospective investor in Ghana.
Objectives
of the Centre
The objectives of the GAC are:-
- To provide a forum for the resolution of disputes
through arbitration, and other alternative dispute
resolution (ADR)mechanisms.
- To promote the resolution of disputes by arbitration
and ADR and the study of the laws, rules, practices
and procedures relating thereto.
- To promote opportunities for educating the public
through the reading of papers, delivering of lecturers
and the holding of seminars on the subjects of arbitration
and ADR.
- To publish or assist in the publication of proceedings
of the Centre and of books, articles and papers on
arbitration and ADR.
- To sponsor, study and research in arbitration and
ADR and provide fellowships, grants, scholarships
and bursaries for this purpose to deserving applicants.
- To affiliate and or co-operate with any other centre,
societies or organisations which have similar objectives.
- To provide accreditation for members of the Centre
to act as arbitrators or mediators or conciliators
in resolving domestic and international disputes.
Recourse to the Centre
- Parties to a contract may provide in advance in
the contract that disputes arising under or in connection
with the contract will be referred to the Centre for
settlement by arbitration or conciliation or other
ADR.
- Parties to a dispute which may or may not be pending
before a court may also agree adhoc to refer such
a dispute to the Centre for resolution by arbitration
or other ADR.
- The Centre will maintain a National Panel of Arbitrators
and Conciliators, being accredited members of the
Centre who have been duly selected to act in these
capacities.
- Parties who refer disputes to the Centre for settlement
may appoint arbitrators or conciliators, as the case
may be, directly or request the Centre's assistance
in selecting them from the above panel. It has to
be stressed that the selection of arbitrators or conciliators
is the prerogative of the parties to the dispute.
The Centre may offer suggestions or recommendations
if the parties fail to agree on the selection.
- The Centre has issued Arbitration rules that will
govern the initiation and conduct of arbitration of
proceedings under the auspices of the Centre. The
Arbitration Rules are deemed to be a part of any arbitration
agreement between parties to a dispute that provides
for arbitration under the auspices of the Centre.
In due course, the Centre will formulate appropriate
rules to govern conciliation proceedings.
For further information, contact:
The Chairman
Ghana Arbitration Centre
P.O. Box 0600
Osu, Accra
Ghana
Tel/Fax: 233-21-300476
Forum
for Mediation and Conciliation of the Ghana American Chamber
of Commerce
The Ghana America Chamber of Commerce in Ghana has also
established a Forum for Mediation and Conciliation. (AMCHAM)
with mandate to handle disputes, particularly business
disputes. AMCHAM has also published Rules to govern proceedings
within the Forum.
Government supports these worthy initiatives and has pledged
its commitment to take advantage of these mechanisms by
submitting to the jurisdiction of these fora, should it
became necessary. These initiatives are without doubt,
very attractive features of the dispute resolution process
in Ghana.
Government Commitment
There is an increasing tendency to investigate government
commitment to the Private Sector. This factor is perceived
to be an important determinant of investment security.
Government commitment is fast becoming a crucial indicator
of investment security beyond the traditional protection
regimes already discussed in this article. There are indications
that in the future this factor is likely to carry more
weight in assessing investment security. Judging from
the various protection mechanisms described in the general
infrastructure for investment, one can conclude that there
is ample evidence of government commitment to create an
attractive and congenial investment environment and to
continue addressing the problems and fears related to
investment security. One does not have to go far to ascertain
the evidence of government commitment.
The following specific measures represent evidence of
government commitment to the Private Sector in Ghana:-
- The positive encouragement of investors through
the activities of the Ghana Investment Promotion Centre,
the Ghana Free Zone Board, which offers tax, tariff
and other regulatory reliefs to enable exporting enterprises
to produce goods at low cost and to achieve globalised
manufacturing status.
- A liberalized Technology Transfer Regime, which
aims at promoting technological skills and management
expertise in local enterprises;
- Liberalization of the financial market;
- The general incentives, which are carefully designed
to attract investors (both foreign and Ghanaian);
to reduce financial risks to investors; to free investment
capital and; to reduce high start up costs;
- The liberalization of the laws and regulations controlling
the entry and establishment and the principle of national
treatment which permits unrestricted foreign participation
in all sectors of the economy with the exception of
unsophisticated activities with low capital outlays;
- The liberalization of the investment screening process;
- The on going privatization programme, which involves
total or partial transfer and control of publicly
owned assets to private sector investor or entities
(both foreign and Ghana);
- The effective organization of the private sector
associations i.e. the sectoral Chambers of Commerce,
the Association of Ghana Industries and other business
associations under the umbrella of the Private Enterprise
Foundation (PEF), an apex institution with mandate
to play an advocacy role on behalf of the private
sector.
- The commitment of government to contribute to the
achievement of economic integration and investment
liberalization within the ECOWAS sub-region with a
view to increasing market size;
- The Gateway project, which is mandated to remove
all legal, institutional and procedural impediments
to the development and growth of the Private Sector
in Ghana.
On the day of his inauguration as President of the Republic
of Ghana, His Excellency, President J.A. Kuffuor declared
that the period of his Administration will mark "THE
GOLDEN AGE OF BUSINESS". This has become a standard
and a compass for all institutions and agencies of Government
that deal with investments.
To Ghana's private sector operators, this vision represents
a source of hope, pride and confidence in the relationship.
Definitely, it should be a push factor for the inflow
of foreign direct investments and other forms of business
collaboration with investors and suppliers of technology.
The President has, in pursuance of this vision, appointed
a Minister of State for the Private Sector as a link between
the Cabinet and the Private Sector operators.
The evidence supports the fact that there is a conscious
and systematic effort by the Government of Ghana to enhance
investment security in Ghana. This is one of the positive
attributes of the investment promotion process in Ghana.
Given Ghana's profile in terms of investment security,
it did not come as a surprise that Ghana passed the very
strict eligibility criteria, which has a major investment
security component, to qualify as a beneficiary under
the African Growth and opportunity Act of the US Government
(AGOA scheme).
THE GOLDEN AGE OF BUSINESS
provides the golden vision and the golden chord that binds
the Government of Ghana and the Private Sector as partners
in the country's development process.
Ghana
assures you of investment security.
Invest in Ghana!!! |
