Freezones and a private developer sign a memorandum of understanding to develop a special economic zone in the Western region

The Ghana Free Zones Authority (GFZA) has signed a Memorandum of Understanding (MoU) with a private developer for the development of approximately 1,500 acres of land located at Yabiw/Shama in the Western Region.

Designated under its special economic zones, an amount of between US$250 million and US$300 million is expected to be spent on providing world-class infrastructure such as roads, electricity with a dedicated power plant, processing plant sewage, container depot, office complex, and residential complex, among others.

The Managing Director (CEO) of GFZA, Michael Oquaye Jnr, who announced it, added that the project, when completed, will create thousands of jobs and become another source of foreign exchange for the country.

He was speaking at the media launch of the 3rd Annual Investment Week 2022 in Accra.

The week-long celebration is themed: “The GFZA champions export-led industrial growth in the context of the AFCFTA and global trade”.

“So far, the site has been re-surveyed and legal proceedings have been initiated to classify the site as a free zone industrial park. For analytical purposes, the authority has also collected data on some key sectors of the Ghanaian economy, such as crops and animal production, forestry and timber, minerals and petroleum, existing industrial developments, ports and logistics, imports and exports, cost of doing business and taxes.

“The data should allow the developer to establish the availability of raw materials in the region and the country to ensure sustainable production by the companies. The signing of the main contract is imminent,” said Mr. Oquaye Jnr.

Enclave of free zones

He said that of the 217 companies operating in the free zone enclave, 72 were 100% Ghanaian companies, accounting for 33%, and 74 were wholly foreign-owned companies, accounting for 34%, and 72 were joint ventures, representing 33%. .

This, he said, indicates that Ghanaian companies also have the potential to take advantage of free zone incentives and gain a foothold in the international market.

He said the free zones program had been misinterpreted as primarily favoring foreign investors.

Mr. Oquaye Jnr. said instead that the program was open to all investors, both foreign and local.

“Furthermore, with the opportunities that the AfCFTA also provides, we are encouraging Ghanaian businesses to take advantage of Africa’s 1.3 billion markets to expand their businesses,” he added.


Impact on economy

He said the impact of these achievements on the economy cannot be overstated.

He said the theme was chosen to reflect the government’s emphasis on export-led industrialization and the implementation of the AfCFTA.

“We are currently struggling with a trade deficit and the depreciation of our national currency; therefore, we need to increase our exports to earn the necessary foreign exchange to stabilize the cedi,” he said.

He said that export-led industrial growth was one of the most appropriate strategies for achieving economic development; that had been the mandate of the GFZA.

Thus, the importance of the free zones program in reversing the country’s trade balance deficit and the depreciation of the cedi was vital.

He said his team recognizes the potential of the AfCFTA to attract market-seeking investment and encourage local businesses to export to the African market, adding that “AFCFTA has provided Ghana with the opportunity to export to Africa, with an estimated market size of 1.3 billion people.

He said that by pursuing an industrial growth strategy focused on exports and the huge opportunities offered by the AfCFTA and the world at large, the problems of unemployment, low export earnings, lack of value addition to our natural resources, the lack of diversification of our export products, and being an insignificant player in continental and global value chains can be resolved.

Achievements

He said regarding their achievements, 39 new businesses have been licensed and are expected to inject an estimated $230 million in capital into the economy.

In addition, the estimated export earnings of the 39 companies are US$529 million with an estimated production value of US$436 million.

He said the Free Zones company’s cumulative exports since the program’s inception amounted to $27 billion in 2020.