Natural Resource Governance Expert Dr. Steve Manteaw has called for a total overhaul of Ghana’s Free Zones policy, arguing that the initiative has been in place for decades without sufficient evaluation of whether it is still delivering the economic transformation the country needs.
His call comes against the backdrop of renewed cedi stability, which he says presents Ghana with an opportunity to rethink how economic policies are structured to build domestic production, attract productive investment and reduce the country’s dependence on imports.
Dr. Manteaw believes that although the cedi’s stability is a welcome development for economic transformation, it must be complemented with some reforms to reap the benefits.
In this light, he says Ghana must take a fresh look at policies such as the Free Zones regime and determine whether they are still achieving their intended purpose or have become vulnerable to abuse.
“The concept has outlived its usefulness”, the analyst maintained, arguing that the Free Zones concept has outlived its usefulness in its current form and should be subjected to a comprehensive review, with the policy redesigned to reflect Ghana’s present economic realities.
The Free Zones regime was introduced to encourage export-oriented businesses by providing incentives that make it easier and more attractive for companies to establish production operations in Ghana.
But according to Dr. Manteaw, a policy cannot simply continue indefinitely because it was once considered useful.
“We cannot implement a policy for decades without evaluating its impact,” he said, calling for the policy to be re-evaluated and modified to curb abuses.
The concern is particularly important because incentives provided under special economic regimes ultimately have an economic cost. If companies receive tax, customs or other concessions without generating sufficient exports, jobs, local value addition or technology transfer, the country risks giving away revenue without securing the transformation those incentives were designed to produce.
He suggests that the proposed overhaul should therefore not simply mean removing the Free Zones policy altogether. The bigger question is whether the incentives are producing measurable economic returns.
A reformed regime could, for instance, place greater emphasis on companies that demonstrate genuine export performance, employ significant numbers of Ghanaians, source inputs locally, transfer technology or process Ghanaian raw materials into higher-value products.
While cedi stability can reduce inflationary pressures and make imported machinery and technology cheaper, he warns that it could also encourage more consumption imports if the country does not deliberately channel the benefits towards productive investment.
That is why he wants Ghana to rethink its economic incentives more broadly alongside his call for the abolition of the 5% duty on industrial machinery.
The objective, he says, is to ensure that Ghana’s economic policies reward production rather than simply facilitate economic activity that does not generate sufficient domestic value.
