Economist and West African Regional Director of CUTS International, Appiah Kusi Adomako, has urged the government to draw lessons from international best practices as it considers scrapping Ghana’s minimum capital requirement for foreign investors.
The economist and lawyer is warning that a wholesale removal risks exposing indigenous businesses to unfair competition, especially in sensitive sectors like retail and services.
In an opinion copied to The High Street Journal, he is instead recommending that Ghana adopt a sector-sensitive strategy similar to those used successfully in other countries.
Learning from Vietnam, Rwanda, and South Africa
The economist reveals that Vietnam, for example, applies higher thresholds for capital-intensive sectors like hospitals but sets far lower requirements for lighter industries such as software development.
This targeted approach, Adomako noted, has allowed Hanoi to both attract foreign direct investment (FDI) and protect domestic players in health and technology.
Rwanda, often celebrated as Africa’s investment hub, scrapped general minimum capital requirements but retained safeguards in strategic sectors like mining and tourism to avoid overdependence on foreign investors.
Similarly, South Africa maintains differentiated thresholds, protecting small local businesses in retail while welcoming big foreign capital into mining and finance.
Global Guidelines Support Flexibility
International frameworks, including those from the OECD and UNCTAD, also caution against arbitrary, one-size-fits-all barriers.
Instead, they advocate rules that are proportional, transparent, and aligned with clear policy objectives.
“The OECD and UNCTAD investment frameworks similarly advise against arbitrary high barriers to entry, urging instead that rules be proportional, transparent, and aligned to legitimate policy objectives,” he noted.
The Bottomline
Appiah Kusi Adomako says Ghana has the policy space, emphasizing that Ghana retains full policy space under ECOWAS and AfCFTA rules to design its own framework.
He notes that what matters is ensuring foreign capital complements, rather than displaces, local enterprise.
While the government is keen on attracting more FDI, the economist insists the right lesson from abroad should direct and guide the reform that the government is seeking.
