GHANA PROMOTES REGIONAL INVESTMENT HUB TO CODEL BUTTERFIELD

UNCLAS SECTION 01 OF 02 ACCRA 000832 SIPDIS SENSITIVE BUT UNCLASSIFIED E.O. 12958: N/A TAGS: PREL PGOV ETRD GH SUBJECT: GHANA PROMOTES REGIONAL INVESTMENT HUB TO CODEL BUTTERFIELD ¶1. (SBU) Summary: During an August 17-19 visit to Ghana, CODEL Butterfield discussed ways to strengthen bilateral cooperation on trade and investment with Government of Ghana (GOG) leaders. President Mills underlined Ghana's commitment to removing investment obstacles, and said Ghana aspires to remain an example of responsible governance and economic development. The Foreign Minister noted that the global economic downturn has adversely affected Ghana by reducing investment, decreasing remittances, and destabilizing commodity prices. The Ministers of Finance and Trade urged greater U.S. investment in agriculture, and called for American companies to use Ghana as a regional hub, given the country's stable political environment. The Trade Minister praised the Millennium Challenge Corporation's (MCC) investment in agricultural infrastructure, but said MCC procurement procedures were "tedious," and urged greater flexibility. On managing future oil revenue, the Finance Ministry said GOG efforts are focused on ensuring transparency, accountability and capacity in the energy sector. The Codel also participated in a roundtable discussion with business and government leaders, discussing mechanisms to stimulate Ghanaian competitiveness as well as increased trade and investment between the two countries. End Summary President Mills: Ghana Seeks Partnership for Development ¶2. (SBU) On August 18, CODEL Butterfield, comprised of Chairman G.K. Butterfield (NC),Representative Sheila Jackson-Lee (TX), Representative Lacy Clay (MO),Representative Gwen Moore (WI),and Representative Steve Cohen (MO),accompanied by Ambassador Teitelbaum and staffers, met with President John Evans Atta-Mills, Minister of Foreign Affairs Alhaji Muhammed Mumuni, Chief of State Protocol, Ambassador Ken Kanda, and Secretary to the President, James Babaku-Mensah at Osu Castle. ¶3. (SBU) Representative Butterfield expressed appreciation for the GOGQs hospitality and friendship and commended Ghana for its effective democratic governance. He noted the long history of strong relations between the U.S. and Ghana, as evidenced by President Obama's recent visit. He underscored that while America currently faces its own domestic challenges, the U.S. could not overlook the importance of relations with Africa. He expressed his belief that America's policy toward Africa must include both aid and foreign direct investment. Representative Butterfield concluded by pledging U.S. commitment to partnering with Ghana in its development and to stimulating investment in "the emerging market of West Africa." ¶4. (SBU) Minister Mumuni warmly welcomed the Codel and echoed the delegation's wish that the countries continue their partnership for economic growth and development. Minister Mumuni highlighted the long history of beneficial relations between the U.S. and Ghana, noting the numerous visits by sitting U.S. Presidents to Ghana. He expressed concern that the recession in the West was negatively affecting Ghana by reducing investment levels, decreasing remittances and causing unstable commodity prices. He welcomed the delegation's efforts to work together on attracting foreign direct investment (FDI) to Ghana. ¶5. (SBU) In welcoming the delegation, President Mills recalled the long history of U.S. assistance to Ghana, expressing his gratitude for the American Peace Corps volunteers who arrived after Ghana's independence in 1957 and filled a void left by departing British teachers. He called President Obama's selection of Ghana for his first sub-Saharan Africa visit a "great honor," recognizing that Ghana's multi-party democracy sets an important example throughout Africa. President Mills committed to removing obstacles to foreign investment, creating an atmosphere in which investors can operate freely while earning profits. He welcomed the U.S. as a development partner and said that Ghana should serve as an example for the rest of Africa in both responsible governance and economic development. Ministers for Finance and Trade See Bright Economic Future and Seek Investment in Agriculture and Energy ¶6. (SBU) CODEL Butterfield met with Kwabena Duffuor, Minister of Finance and Economic Planning, Hannah Tetteh, Minister of Trade and Industry, Professor Newton Kusi, Acting Chief Director, Ministry of Finance, Mr. William Kofi Larbi, Chief Director, Ministry of Trade, Mr. George Gyan Baffour, Deputy Finance Minister, and Dr. Joe Amoako-Tuffour, Tax Advisor, Ministry of Finance at the Finance Ministry. Representative Butterfield expressed the desire to encourage direct U.S. investment in Ghana and promote mutually-beneficial trade. He noted his observation of a new attitude in Africa, whereby leaders sought less aid and more investment, and expressed hope that the U.S. and Ghana would build a partnership for growth and development. ¶7. (SBU) Minister Duffuor acknowledged that Ghana seeks greater foreign investment, and stated that Ghana concurrently seeks continued aid in building capacity. He noted that while Ghana has ACCRA 00000832 002 OF 002 faced economic challenges over the past year, including fiscal and current account deficits, a drop in gold prices, and arrears in debt service payments, Ghana's economy is steadily improving and faces a "very bright" middle-term outlook. Minister Duffuor noted that Ghana is carefully preparing to deal with expected oil revenues and will not abandon other sectors of the economy as oil production increases. He encouraged foreign investment in three specific sectors: gas, agro-processing, and salt production. ¶8. (SBU) Minister Tetteh expressed gratitude for the Millennium Challenge Corporation's investment in agricultural infrastructure and for USAID's technical assistance in trade and investment policy. She welcomed additional American investment in agriculture, noting that while 60 percent of Ghanaians work in agriculture, the sector represents only 30 percent of GDP. She highlighted the need for capital investment, human capacity-building, and technology transfer. Minister Tetteh also encouraged further investment in Ghana's cocoa sector, an industry that already sees investment from a leading U.S. agricultural firm, Cargill. The Minister called for American companies to use Ghana as their regional hub, noting the country's political stability, respect for law and order, and skilled workforce. ¶9. (SBU) Dr. Amoako-Tuffour reviewed the government's efforts to prepare for future oil revenues, noting that the GOG's primary goal is to promote transparency, accountability, and capacity building in the energy sector. He indicated the government was focused on developing the institutional structures and regulations to support the oil industry and to provide both incentives and protection for investors. He also noted that the government is consulting with other countries on how to manage the projected revenues and ensure that the revenues transfer into other sectors of the economy. ¶10. (SBU) Representative Jackson-Lee inquired about the process for using oil revenues to improve services such as the public education system. Deputy Minister Baffour responded that there are several proposals under review, including a planned Heritage Fund to direct a portion of oil revenue to social development projects. Jackson-Lee also asked for feedback on the Millennium Challenge Corporation's effectiveness in Ghana. Minister Tetteh responded that the MCC program in Ghana is a success, but that a "tedious" procurement process makes it time consuming to get money allocated. She recommended that greater flexibility be introduced into the procurement process, awarding contracts to certain local firms who might not be the lowest cost provider but would gain valuable capacity-building experience. Representative Jackson-Lee extended a formal invitation for GOG officials to visit Houston and meet with energy industry leaders. ¶11. (SBU) Representative Butterfield asked if Ghana is currently receiving revenues from oil exploration. Minister Duffuor responded that Ghana is not seeing any oil revenues at present. ¶12. (SBU) Representative Moore asked how U.S. and European agricultural subsidies impact Ghana's agricultural sector. Minister Tetteh responded that subsidies hinder Ghana's competitiveness and that Ghanaian farmers seek greater protection. Minister Tetteh also noted that Ghana requires investment in infrastructure to improve farmer efficiency, which will in turn mitigate the effects of foreign subsidies. Representative Moore also inquired about Ghana's ability to borrow money from the international capital markets. Minister Duffuor noted that since the cost of borrowing from capital markets is higher than from international financial institutions (IFIs),and since the IFIs imposed few conditions on their loans, Ghana would continue to seek capital from the IFIs. ¶13. (SBU)On August 18, Codel members participated in an economic forum organized and sponsored by the Business Council for International Understanding (BCIU). The Ghana Competitiveness Forum involved participants from Ghanaian government (both Ministerial and operational levels),traditional leadership (King Adamtey I), Ghanaian private enterprise as well as U.S. private sector businesses. Ambassador Teitelbaum and representatives from MCC and FCS also participated. Among the topics discussed were: increasing U.S.-Ghana trade, encouraging sustainable and diversified growth in Ghana, supporting increased involvement by U.S. and Ghanaian small and medium enterprises in future business opportunities in both countries, and ensuring diversified growth in Ghana. Representative Jackson-Lee Meets with Former President Rawlings ¶14. (SBU)Representative Sheila Jackson-Lee also held a separate meeting on August 18 with former President Jerry Rawlings. Representative Jackson-Lee recognized Rawlings' contributions to Ghana's democracy and sought his views on both development and conflict resolution in Africa. Rawlings gave a brief tour d'horizon but particularly expressed his concerns over stability in Nigeria. ¶15. (U)CODEL Butterfield has cleared this message. TEITELBAUM