A Research Fellow at policy think tank, IMANI, Mr. Bright Simons, is counseling government against relying on, and regarding as successes, pledges of foreign direct investment.
Doing so, he believes, can mislead the government into falsely presuming that the nation was doing excellently well in attracting foreign direct investment when, in fact, the reality may be entirely different.
President JEA Mills, delivering his fourth State of the Nation address to Congress Thursday said, “The positive economic indicators we have achieved have resulted in increased investor confidence in the economy.”
He added that, “A fortnight ago the Ghana Investment Promotion Centre released figures showing an increase in projects registered at the GIPC amounting to over $7billion in foreign direct investment.”
But Bright Simons said the figures given by the president were quite misleading.
“When you disaggregate those figures, you find out that $5.5 billion of that $7.6 billion are due to STX and Asanteman Home Company; these are investments that have not been realized as of the end of 2011 and going forward there is every suggestion that they won’t be realised this year…which means that of the $7.6 billion, more than $5.5 billion has actually not materialised…so If we continue to use these figures to justify our investment attraction policy it means that, [it is misleading],” he stated.
Mr. Simons emphasized that in real terms, about $20 million has touched the country as capital for investments.
Therefore, “If you are going to use the headline figures to say, for instance, that you now have to focus on tax and the GIPC (Ghana Investment Promotion Centre) law around taxation and revenue management, as opposed to focusing on how we convert pledges to actual transfers, you get a distortion because what is happening is that people are pledging us a lot of money in foreign direct investment but not all of it is showing up,” he added.
Mr. Simons also took issues with the president’s reference to single digit inflation, maintaining that while consumer inflation had remained single digit, producer inflation was double that figure which reduced the competitiveness of manufacturers and producers in the country.
Responding to Mr. Simons’ counsel, Communications Director at the Presidency, Mr. Koku Anyidoho, said he was not in a position to speak to the FDI figures.
He however said the low inflation rates were a testament to the robustness of the economy.