HE the Ambassador of Norway, Ms Hege Hertzberg, repeats her mantra to the journal Ghana Business & Finance this wek: It is crucial for Ghana’s future development that the major political parties can reach consensus on the key operating conditions for investors in the petroleum sector.
“Lesson number one from the Norwegian petroleum experience is to make sure foreign investors have fair and predictable conditions, regardless of the government in power. If party politics and power play threatens to undermine investments and leaves an impression of unstable and unpredictable conditions, the serious investors tend to leave,” she underlines in the interview.
“It is the peoples welfare and livelihood that are at stake”, says the Ambassador. “Investors create jobs, and government revenue from the taxes are after all paying the bill for health care, education and infrastructure.”
Her impression is that Ghana is a highly politicized country, and the tradition for consensus is not strong. Political disagreements are important in a democracy. However, one may agree on where to agree, and where to disagree.
“In the petroleum sector, Norway has contributed to the regulatory and fiscal framework through our Oil for Development Program. Hopefully, this will lead to more predictability. Continuity still requires that any incoming government honors agreements reached and contracts signed under the former government.”
Relative monetary and fiscal stability
Ghana and other West African countries have seen a high level of economic growth in the recent past, which makes the region very attractive to foreign investors. “Neither the current economic downturn, partly due to factors that individual countries cannot control, nor practical challenges facing businesses, can dissuade Norwegian companies from keeping West Africa on their radars,” says Ms Hertzberg. “Maintaining a stable democracy with low levels of crime and violence, respect for the rule of law and strong anti-corruption efforts are all requisites for a flourishing business cooperation.”
In her view, Ghana has managed to maintain relative monetary and fiscal stability in turbulent times. “This is a very important factor. Exaggerated community expectations to a new source of wealth could easily have led to even more overspending. Still it seems that expectations are unrealistically high, and need to be managed.”
Factors that undermine predictability
“The greatest damage to predictability is when the rule of law is set aside, and decisions are hinged on corrupt practices. This scares investors away. Access to energy, to credit facilities and to predictable arrangements for the use of land are also major issues. Any investor will need to look carefully into these. It looks like the energy availability will improve substantially over the next few years,” says the Norwegian envoy.
She sees land acquisition as one of the most severe challenges affecting business setup and expansion. There are well known challenges related to registration, documentation of tenure and land rights, and formalization of ownership rights.
The Norwegian envoy acknowledges that corruption is a problem. “The exact level of corruption is hard to measure. It is in the nature of corruption that it is illegal and thus belong to the criminal economy. Corruption is stealing your fellow citizen’s money. The corruption issue is for Ghana, not Norway to solve. However, it always takes two to tango. It is a corrupter and a person who accepts corrupt practices.”
Most Norwegian companies have strong internal policies against paying bribes for a contract or speedy services. Companies that are listed on international stock exchanges are prohibited by Norwegian law to pay bribes. Norwegian buseness leaders have in several intances been charged and convicted for corrupt practices abroad.
New opportunities for business cooperation
“Ghana has ample opportunities for cooperation with Norwegian businesses and our government, including in fields where Norway has particular advantages, such as the maritime sector, marine and seafood sectors, offshore oil and gas, the energy sector, agribusiness and real estate” says Ambassador Hertzberg.
Within the next six months, two important Norwegian institution will extend their activities to Ghana. The Norwegian Seafood Council will promote trade in seafood between the two countries. Norfund, the Norwegian Government Investment Fund for Developing Countries, will open their West Africa Office here. It is a strong signal that investors look to Ghana and West Africa for opportunities. Hopefully some of the hurdles to investments in Ghana can be highlighted and addressed through the work of Norfund.