The Ghana Free Zones Authority (GFZA), has given the strongest indication that it will henceforth scrutinize thoroughly, companies that apply to work in its enclaves to check abuse and other lapses, including inactive companies still occupying its books.
The Authority disclosed that it was getting ready to delist some 81 inactive companies out of a total of 201 firms it has registered.
After the delisting, those interested to return, will face stiffer scrutiny.
Executive Secretary of GFZA, Michael Okyere Baafi, who announced this says unlike the past when companies registered with the Authority with questionable backgrounds, his administration will henceforth, use all available means, to examine new companies that will seek to work in the Free Zone area.
This, according to him, is to ensure that loopholes that permitted unqualified firms the lee way to be on the list of the Authority, are completely sealed.
The Free Zones boss, said with the help of the Central Bank, it would go every length to ensure firms it engaged deserve the licenses issued them, adding even if it will mean checking from abroad to verify their authenticity and strength in terms of capital, it will do so.
“We realized that we were not so strict in the licensing application process, because if we were so strict in the licensing application process, you will know that, you cannot stand up and give somebody a license when you have not done a lot of work. Now for the first time, we are doing a lot of background work about the companies”.
“So at first, you just submit a document but now, we will even go to the off taker you are talking about, the market you think you have in Europe or America, we will go there and find out. We will check your balances, the moneys you said you have, your initial capital, is it true whether you have that money in your account, through Bank of Ghana’s help”.
Speaking at a news conference ahead of the Authority’s Investment Week Celebration in Accra, Mr Baafi, assured that under his watch; only companies that understand the concept of free zones and are up to the task, would have the privilege to work with GFZA.
He revealed, since his appointment, many companies have expressed the desire to be given license, but they were denied simply because, they did not meet the new standard.
“During our time it can’t happen.. . If I tell you the companies that have come to us wanting to be licensed, you would be shocked but we denied them. When we assess you and realize you cannot do it, we don’t allow. We look at those who can do it. We want people who understand the concept of free zones and are determined to work”, he said.
The Herald understands the Authority is working to amend it Act 504 promulgated in 1995 to suit current trends in the free zones business.
“The Act 504 of 1995 has not seen any review which is very dangerous because, we are doing international business, we should be modern, we should be consistent with what is happening now and we think that, for us as an authority, we can be more effective if the act is reviewed so that we will to fit into modern day free zones.
The Authority is working to increase minimum capital required to work with it. Mr. Baafi said when the Act is reviewed hopefully by close of this year; cap will be placed on companies wanting to work in the enclaves.
“Free zone is the only company that does not have cap, so if you are coming in, you can even come with $100, 000 and you can still do business and we think that is not right. In the amended process, one of the things we are looking at is capping, he said.
Mr Baafi went on “we want companies to come with a specific amount of money so you cannot say that I have 100, 000 dollars and am coming to invest because they do that and they make more money. We want companies to come with a specific amount of money”.
At the same news conference, the Authority said it has been permitted to delist, companies which have remained in it books but are inactive. The Executive Secretary said nonperforming companies which will be removed after auditing, will face stiffer scrutiny in the event that they request a comeback.
“The board has given us approval to delist inactive companies. We have stiffened the laws. We are working on the modalities, we are going to hire auditor to do that work for us. Those who will be removed will face stiffer scrutiny unlike before. These are some of the things we are doing to make sure that companies work well and those which are ineffective or inactive can be delisted”.
He noted that there are some companies which are registered as export companies, but have failed over the years to export. This, he said cannot continue under the current dispensation.
“You can only determine whether a free zones company is active or not by how many export it is able to do a year. You cannot just decide not to do export and still be a free zones company, some companies are just on paper like that, they have not done even one export”.
He warned companies that are in good standing, but fail to submit their quarterly returns, will be fined $2, 000.
Meanwhile, the Authority, has said it does not intend to engage in the usual investment promotions this year. Instead it said, it would be targeting only effective marketing.
Source: The Herald
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