Scrapping minimum capital requirement may hurt local businesses – Prof. Bokpin

Finance and Economics Professor, Godfred Bokpin, has cautioned the government against hastily scrapping the minimum capital requirement for foreign investors.

According to him, such a move could undermine local businesses, particularly small and medium-sized enterprises (SMEs).

Speaking at a Prudential Bank customer seminar focused on sustaining the recent appreciation of the cedi, Prof. Bokpin acknowledged that removing the threshold might attract more foreign investment.

However, he warned that without proper safeguards, it could expose Ghanaian businesses to unfair competition, especially in sectors traditionally reserved for locals.

“The minimum capital requirement under the GIPC Act serves as a protective buffer for indigenous enterprises. Eliminating it without a clear strategy could open the floodgates for foreign dominance in sensitive sectors like retail,” he said.

Prof. Bokpin stressed the need for a balanced approach that encourages foreign investment while preserving the competitiveness of local industries.

He warned that poorly managed reforms could weaken the SME sector, reduce job creation, and threaten the long-term sustainability of local businesses.

“If we don’t manage this well, it could have serious consequences for our small businesses,” he added.