VZCZCXYZ0024
PP RUEHWEB

DE RUEHAR #1504/01 3301619
ZNR UUUUU ZZH
P 251619Z NOV 08
FM AMEMBASSY ACCRA
TO RUEHC/SECSTATE WASHDC PRIORITY 7297
INFO RUEHPC/AMEMBASSY LOME 2167
RUEHCO/AMEMBASSY COTONOU 0809
RUEHAB/AMEMBASSY ABIDJAN 0806
RUEHMV/AMEMBASSY MONROVIA 0829
RUEHUJA/AMEMBASSY ABUJA 0782
RUEHOS/AMCONSUL LAGOS 1775

UNCLAS ACCRA 001504 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EIND GH
SUBJECT: GHANA: AMERICAN BUSINESSES AIR VIEWS ON 
BUSINESS DIFFICULTIES 
 
¶1.  (SBU) SUMMARY: Board members of the Ghana 
American Chamber of Commerce mentioned areas of 
concern for their businesses to econoff in a Board 
meeting.  Several members complained of a lack of 
bureaucratic support for foreign investors.  Mining 
giant Newmont talked about the drive to limit 
expatriate labor to build local capacity and fight 
illegal Chinese labor.  Members aired concerns about 
double taxation by the Ghanaian authorities, and 
related evidence that the global economic downturn 
had already begun to hit Ghana in the residential 
housing sector and access to commercial lending.  It 
was also clear that the Chamber remains a work in 
progress as the American business community grows 
and begins to better organize itself in Ghana.  Post 
will continue its support.  END SUMMARY. 
 
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Problems Investing 
------------------ 
¶2. (SBU) Several Ghana American Chamber of Commerce 
Board members mentioned to econoff problems with the 
Ghana Investment Promotion Center (GIPC), the GOG 
entity tasked with facilitating FDI into Ghana, 
complaining that CEO Robert Ahomkha-LindseyQs 
positive rhetoric does not match the practices of 
his entrenched bureaucracy.  Despite promises to the 
Chamber that Ahomkha-Lindsey had relegated 
problematic staff to the back office, American 
businesses felt that they still were a drag on U.S. 
firms seeking to navigate the Ghanaian business 
environment. 
 
----------------- 
QToo many expats 
----------------- 
¶3. (SBU) Newmont, a mining company that is one of 
the largest foreign investors in Ghana, said that 
the GIPC was under pressure from local businesses to 
limit the number of expats allowed into the country 
due to fears that they were stealing good jobs from 
Ghanaians.  Ghanaian companies can apply for work 
permits for their expats, but foreign firms have to 
work through the GIPC when negotiating investment 
agreements. 
 
¶4. (SBU) According to Newmont, mining firms in Ghana 
were perceived to rely too heavily on expatriates, 
but the reality is that the industry has a short- 
term need for expert expats in niche fields such as 
electrical welding, and countries like the 
Philippines have a corner on the market.  Over time 
these skillsets are less important to their 
operation, and the number of expats decreases 
naturally.  Newmont complained that regulating expat 
labor is self-defeating to the GIPCQs goal of 
domestic capacity building. 
 
---------------------------- 
Illegal Chinese Labor Unfair 
---------------------------- 
¶5. (SBU) Newmont noted two reasons for domestic 
pressure on the GIPC: a) the Ghanaian labor force 
wanted better access to effective job skills and b) 
the perception that Chinese laborers posing as 
tourists were illegally working in the public 
markets and Chinese construction projects, taking 
away low-skilled entry level jobs from Ghanaians. 
The Newmont rep alleged that Chinese construction 
firms were capitalizing on this illegal labor pool 
for large public works projects like the Bui Dam 
construction without immigration control while his 
company caught flak for bringing 60 legal expats to 
work among its 4,000-member Ghanaian workforce. 
 
-------------------------------------- 
Double Taxation Without Representation 
-------------------------------------- 
¶6. (SBU) The representatives also were concerned 
about double taxation by the Ghanaian Internal 
Revenue Service (IRS).  They claimed that the GOG 
IRS had a poor understanding of the U.S. corporate 
tax system, so it tried to revisit GIPC contracts in 
order to get more tax revenue from U.S. firms.  They 
 
said the GOG IRS regularly claims that U.S. firms 
underreport Ghanaian earnings to the local 
authorities, something the businessmen strenuously 
denied.  They asked if the USG had the means to 
organize a U.S. tax seminar for local officials. 
 
---------------- 
Credit Crunched? 
---------------- 
¶7. (SBU) One businessman mentioned that he was 
seeing evidence that commercial lending was 
beginning to tighten up in Accra as a result of the 
global economic downturn.  This has begun to affect 
private capital investment flows in the residential 
housing sector, which had experienced rapid growth 
in the past decade as more entrepreneurs reached for 
the QGhanaian DreamQ of owning property.  (NOTE: 
Drug dealers and government profiteers are also 
rumored to be a small but noticeable part of AccraQs 
housing boom.  END NOTE.) 
 
¶8. (SBU) COMMENT: It is hard to say whether this 
sample of sentiment was representative of the 
nascent American business community or if it was a 
function of being the largest, and easiest, targets 
in town.  But it was clear that unhappiness with the 
GOG investment promotion regime continues to be 
widespread.  Given that for the second month in a 
row, the Chamber could not assemble a quorum of its 
Board, that it lacks a coherent committee structure 
for utilizing the skills of its members, and that it 
continued to be hampered by the absence of a 
professional administrative staff to handle day-to- 
day affairs of the Chamber, it was also clear that 
the U.S. business lobby is a work in progress in 
Ghana.  Post will continue to support the Chamber as 
it develops.  END COMMENT. 
 
TEITELBAUM