Prioritise fiscal stability to attract investments — French business CEOs urge govt

A group of executives representing French businesses that operate in the country have urged the government to prioritise fiscal stability as a key factor to attract foreign direct investments (FDIs). 

They argued that a stable fiscal environment was crucial for businesses to make long-term investment decisions and plan for sustainable growth.

The CEOs said this in an interview with the Graphic Business on the sidelines of a business cocktail meeting organised by the France Ambassador to Ghana at his residence in Accra.

They included the CEO of Decathlon Ghana and Co-founder and CEO Daily Foods, Geoffrey Fadoul, MD Africa Global Logistics Ltd, Thibault Lamé and MD of GFA Consulting, Carole Ramella.

Also present was the Head of the Economic Department, French Embassy, Jean-Noël Blanc.

Contest

The event was to offer an opportunity to the French CEOs, MDs and French executives working for international companies in the country to network and share business ideas.

The event also presented an opportunity for the businesses to voice their concerns and profess suggestions to the government in the wake of the current economic crisis.

They shared some perspectives on the business climate in the country, the International Monetary Fund (IMF) programme and the way France envisions the new diplomatic environment and intentions to implement a new business-oriented policy.

France direct investments represent $2.1 billion and create more than 60,000 direct and indirect jobs in the country.

Policies

The CEOs called on the government to create policies that promoted fiscal stability, such as reducing the budget deficit, simplifying tax regulations, and ensuring consistency in government policies.

They were of the conviction that by prioritising fiscal stability, the government could create a more attractive investment climate that would benefit both businesses and the country’s economy as a whole.

The business executives, however, praised the country’s long-standing democracy and adherence to political stability over the decades.

Impact of economic challenges

The Managing Director of Africa Global Logistics Ltd, Thibault Lamé, said French businesses in the country have been greatly impacted by the current economic challenges.

He, however, noted that the over 70 French businesses operating in the country have all so far proven to be resilient.

“They have all put in place measures to ensure they remain viable and stay afloat. Most of the companies are seeing the Ghana market as the place to be due to the medium to long-term prospects.”

“We know the economy will bounce back. It will take some time to recover but in the medium to long term, there is strong growth expectation,” he stated.

He said some of the companies have been in the country since 1950 and were all confident that they would sail through the current challenges.

“We will weather the storm together and keep investing in Ghana,” he said.

Investors’ appetite

The Managing Director of GFA Consulting, Carole Ramella, who was also present at the meeting, said there was a strong appetite for investors in Ghana despite the current economic challenges.

She said those interest from investors, particularly private equity firms, were in the areas of agribusiness, businesses that were climate friendly and businesses that facilitated financial inclusion.

“These are popular from the investors point of view. The Fintech industry also has great prospects for Ghana,” she stated.

Ghana’s economy

Ghana’s economy has been battling with severe challenges in the last two years, with inflation hitting a 22-year high of 54.1 per cent in December 2022, and an unsustainable public debt crossed 100 per cent of GDP.

In July 2022, the government formally approached the IMF for a fund programme, which was finally approved in May 2023.

Five months after implementing the IMF programme, the economy is beginning to see some stability, with gross domestic product (GDP) growth averaging 3.1 per cent in the first half of the year.

Inflation which reached a 22 year high of 54.1 per cent in December 2022 has also declined to a 12-month low of 38.1 per cent in September and on the fiscal front, the primary balance on commitment basis for first half of the year was a surplus of about GH¢2 billion compared to a target of a deficit of GH¢4 billion.

Gross International Reserves (GIR) also stood at US$2.1 billion equivalent to 1.0-month import cover, compared with US$1.5 billion (0.6 month of import cover) recorded at the end of December 2022, with the Cedi also stabilising.