Balancing Openness and Protection: Rethinking Ghana’s Minimum Capital Requirements for Foreign Investors

At the recent TICAD 2025 Conference in Tokyo, the President of Ghana announced a proposal to abolish the minimum capital requirements for foreign investors operating in the Ghanaian market. These amendments are expected to be incorporated into the new GIPC Act, slated for passage before the end of the year.

Under the GIPC Act of 2013, foreign investors are subject to a tiered minimum capital structure:

• USD 200,000 for joint ventures with Ghanaian partners,

• USD 500,000 for fully foreign-owned enterprises,

• and USD 1 million for trading companies. These thresholds were originally designed to protect certain economic sectors from foreign dominance and preserve opportunities for local businesses. 

Although these requirements have a protective purpose, they have also been criticized for deterring investment, particularly when compared to other African countries with far lower or no capital thresholds.

While the abolition of capital requirements may attract increased foreign direct investment (FDI), a blanket elimination of thresholds could lead to unintended consequences.
Ghana is already an attractive regional investment destination, and without adequate safeguards, there's the risk of foreign firms displacing local enterprises, especially in traditional sectors like retail and services. 

The author proposes a targeted, evidence-based reform, rather than a one-size-fits-all approach. This would involve:

1. Conducting a sector mapping exercise to assess which industries have sufficient domestic investor capacity and which do not.

2. Retaining higher thresholds in sectors where local entrepreneurs are competitive and deserve protection.

3. Reducing or eliminating thresholds in areas with limited domestic capacity but with potential to benefit from foreign technical expertise and capital. 

Examples from other nations highlight the effectiveness of differentiated investment regimes:

• Vietnam applies higher capital thresholds in capital-intensive sectors (e.g., hospitals) while maintaining lower thresholds in lighter tech industries (e.g., software development).

• Rwanda has largely abolished general capital thresholds, except in strategic areas such as mining and tourism, thereby securing FDI while sustaining policy safeguards.

• South Africa similarly maintains differentiated thresholds, using higher barriers to protect small businesses in sectors like retail, while permitting easier entry in mining and finance. 
  The OECD and UNCTAD also recommend that entry barriers be justified, proportionate, transparent, and aligned with policy objectives. 

Applying these principles to Ghana suggests that capital-light, innovation-driven sectors such as fintech, IT services, and start-ups likely do not justify thresholds as high as USD 500,000. On the other hand, trading and retail sectors, where local businesses are numerous but vulnerable, may require continued protective measures.

Moreover, attracting FDI should be accompanied by efforts to develop domestic “champion” firms capable of scaling regionally or globally. As the article notes, economic resilience is reinforced when local businesses grow, repatriate profits, and contribute to long-term stability of the Ghanaian cedi. 

A balanced investment regime would allow foreign investors to enter where they add real value, while protecting sectors where Ghanaian firms have a comparative advantage. This surgical approach ensures that job creation, technology transfer, and economic growth are compatible with domestic entrepreneurial development. 

As Parliament moves forward with consideration of the new GIPC bill, the debate should transcend a binary abolish-or-retain threshold stance. Instead, lawmakers and stakeholders should address critical questions such as:

• Which sectors require protection, and why?

• What evidence supports the maintenance or removal of thresholds in certain industries? 

  How can the rules be designed to yield inclusive and sustainable growth?

  A nuanced, evidence-based reform would combine openness to FDI with a commitment to strengthening domestic enterprises—a pathway to achieving both economic growth and social equity.