GIPC complains of financial difficulties due to economic mess in Ghana; records low FDI inflows
The Ghana Investment Promotion Center (GIPC) has disclosed a financial deficit in its operations over the past two years, raising concerns about the organization's sustainability.
Chief Executive Officer, Yofi Grant, mentioned these challenges during his appearance before the Public Accounts Committee (PAC) of Parliament today, February 20, 2024.
Mr. Grant attributed the deficit to the GIPC's heavy reliance on Internally Generated Funding (IGF), emphasising the difficulty in raising the necessary revenue amidst the current economic challenges facing the nation.
"On a recurrent basis, we manage to take over our liabilities. But if you look at it in terms of the accounts itself, you see a deficit. Now, what happened in those two years is that the deficit was funded by surpluses we had incurred over the previous years. That was when we were able to rake in quite a significant amount of IGF," explained Mr. Grant.
He further highlighted the impact of the competitive investment landscape and stringent fiscal rules in the country, making it challenging to derive sufficient revenue to sustain the institution.
Mr. Grant emphasised the need for a comprehensive solution, stating, "So we have actually done a paper to the Ministry of Finance, with the help of the World Bank and other agencies who have supported us to change the funding structure of GIPC in accordance with global standards."
He proposed a funding restructure for GIPC, advocating that relying on IGF is unsustainable in the long run.
"The real solution is to look at how GIPC, as the state's investment promotion agency and the reception to the country, is financed. I propose that it's an anomaly to be funded from IGF because the IGF, we are going to see decreases along the line," he said.
Acknowledging the challenges, Mr. Grant expressed cautious optimism about covering the operations for the current year, citing certain receivables.
However, he underscored that the situation is becoming increasingly precarious, resembling a "hand-to-mouth" scenario.
As GIPC addresses its financial constraints, stakeholders await potential changes in the funding structure to ensure the long-term stability of the organization in promoting and attracting investments to Ghana.
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