The Ghana Free Zones Authority With Michael Okyere Baafi: The Journey So Far

Michael Okyere Baafi

Michael Okyere Baafi

“People who help you in life, you don’t kill their soul”, one of the famous and inspiring quote of Mr.Micheal Okyere Baafi. This is not a talk show but a guiding principle in building a strong bond with people in life.

I’m motivated to write this short paper on account of the many success stories of the Ghana Free Zones Authority with Mr.Michael Okyere Baafi as the Executive Secretary. This is as a result of the numerous catalyst strategies taken by the celebrated Chartered Marketer, which has transformed the face of the Ghana Free Zone Authority through increase in investor confidence, transfer of technology and knowledge, rise in employment for nationals, foreign exchange earnings among others.

Like any other investment promotion agencies such as Ghana Export Promotion Agency and the Ghana Investment Promotion Centre, the GhaThe need to develop a country cuts across socio-economic and political factors. In the early 1970s and the late 1980s, the Asian and the Latin America countries took vigorous interventions to propel a total transformation of their respective institutions. The recent achievements of the “Asian Tigers” or the “Newly Industrialised Nations” such as Singapore, South Korea, Taiwan, Malaysia, and China did not just happen within the twinkle of an eye. It was propelled through aggressive interventions, with realistic development plans.na Free Zone Authority is the only non-subverted investment promotion authority that has earned many achievements since Mr.Michael Okyere Baafi took over as the Executive Secretary. The Revered Marketer is motivated by the success stories of many Free Zone institutions in the world, notable Ali Jebeli Free Zone in UAE, and Nigeria as the recently best emerging Free Zone in Africa. I will therefore take the discussion to have a holistic analysis of these success stories of the best performing Free Zones, and the strategies derived from it by the Executive Secretary, Mr.Michael Okyere Baafi, and how it has transformed the Ghana Free Zones Authority.

The epitome of the Free Zone (FZ) concept
The need to develop a country cuts across socio-economic and political factors. In the early 1970s and the late 1980s, the Asian and the Latin America countries took vigorous interventions to propel a total transformation of their respective institutions. The recent achievements of the “Asian Tigers” or the “Newly Industrialised Nations” such as Singapore, South Korea, Taiwan, Malaysia, and China did not just happen within the twinkle of an eye. It was propelled through aggressive interventions, with realistic development plans.

Notable among the industrialization policies were the Free Zones concept. These were established to encourage centre pot trade, mostly in the form of citywide Zones located on international trade routes. As generation passed on, between the 1960s and 70s, countries from across the Middle East were among the pioneers to adopt the new Free Zone concept. It may sound surprising but Egypt, Syria, and Jordan were the first three countries in the region to establish free zones. Currently, in the Middle East, there are approximately sixty Free Zones with more than 20 being in development. The first FZ was established in 1959 in Shannon, Ireland. Brendan O’Reagan, who was an Irish businessman, played an important role in development of both the airport in Shannon and the free zone. He is also known for establishing the first duty-free shop in the world. Between the 1940s and 1950s the airport was primarily used for transit and refuelling, and less as an actual end-destination.

By the late 1950s, O’Reagan understood that the airport would eventually suffer from a lack of passengers due to its location and advancement of airplane technology. In an attempt to increase the airport traffic, he partnered with the Irish government to develop a trade area that would offer exemptions from most trade and financial regulations. In 1959, the idea was put into practice and the Shannon Free Zone was established, creating not only more inbound airplane traffic, but also thousands of new jobs.

While O’Reagan developed the FZ concept, it was Dubai’s Sheikh Maktoum who took it to the next level. Today, UAE is home to approximately forty FZs, half of which are located in the Emirate of Dubai.

Let me take a stop here to explain what the Free Zones means.

Free Zone may refer to: Free economic zone, designated areas in which companies are taxed very lightly or not at all in order to encourage economic activity. Free zone, an area in which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of customs authorities. Well, my explanation can still take the form of, an industrial area within a geopolitical area of a country which is considered the Customs territory for fiscal exemption and other incentives. Various economic and commercial activities which are export-oriented are encouraged within the area.

Now that I have cleared the air of what Free Zones means, I will move the discussion to make my readers know some of the major success stories of Free Zones with the United Arab Emirate and Nigeria as case study.

The United Arab Emirate Free Zones
Undoubtedly, the largest free zone in the world is the Jebel Ali Free Zone, also known as Jafza. It was established in 1985 and has been the cradle of UAE FZs since then. Initially, Jafza started with only nineteen companies. Today, it is home to more than 7,000 companies from more than 100 countries. As of 2015, Jafza have created more than 160,000 jobs and portfolio of its tenants includes more than 150 companies from the Global Fortune 500 list.

Nevertheless, according to Financial Times’ fDi intelligence, the most successful free zone in the world is the Dubai Multi Commodities Centre, also known as the DMCC. It’s not as old as Jafza, but it has gone through a very impressive transformation over the past decade. Due to its location and exceptional benefits, the DMCC has managed to attract over 10,000 companies generating more than 85,000 jobs.

The UAE’s DMCC Free Zone has achieved a hat-trick, winning Global Free Zone of the year for the third time running. Compatriot Jebel Ali Free Zone is runner up for the second year, with other award winners hailing from all around the world.

According to Jebel Ali Free Zone’s submission, the zone contributes more than 20% of Dubai’s GDP, helping to secure the award for Contribution to National Economy. More than 125,000 people are employed in the zone, which also accounts for more than 30% of inward FDI into the country.

The Ladol Free Zones, Nigeria
From the Africa perspective, Ladol Free Zone, Nigeria, saw its occupied space increase by more than 7% between 2015 and 2016, during which time the number of people employed by companies there jumped by more than 62%. Ladol’s goals include the promotion of sustainable business practices and the addition of $12,000bn to the economy by 2030. It also aims to reduce business costs for multinational companies wishing to invest in Nigeria and the West Africa region.

The zone is home to Africa’s largest shipyard, while also boasting the heaviest crane capacity in the region. An office for the Nigerian Export Processing Zone Authority is currently under construction, which will offer businesses better access to the authority and encourage investment from companies interested in exporting goods. Ladol has begun to develop an onsite 50-megawatt (MW) gas power plant, with the first 24MW coming online in the first phase. This will provide a reliable power source to investors, to the benefit of the West Africa region.

The Ghana Free Zones Authority
The Ghana Free Zones Authority, an episode of an emerging industrialised concept that has seen a national and international significant transformation, with Mr.Michael Okyere Baafi as the Executive secretary.

The Ghana Free Zones Authority (GFZA) was established on 31st August, 1995 by an Act of Parliament – The Free Zone Act 1995 (Act 504), is to enable the establishment of free zones in Ghana for the promotion of economic development; to provide for the regulation of activities in free zones and for related purposes. The Board operates under a regulation (L.I. 1618). Actual implementation of the Programme commenced in September 1996.

The mission is to help transform Ghana into the Gateway to West Africa by creating an attractive and conducive business environment through the provision of competitive free zone incentives and operation of an efficient “one-stop-shop” for the promotion and enhancement of domestic and foreign investment.

The vision is to facilitate a vibrant economy in Ghana, driven by a well-integrated business environment with world class capacity for competition, technological innovations, business growth, economic diversity and development. The Ghana Free Zones Programme is designed to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encourage the development of commercial and service activities at sea and air-port areas. In essence the whole of Ghana is accessible to potential investors who have the opportunity to use the free zones as a focal point to produce goods and services for foreign markets.

The Ghana Free Zones Authority has nine members who are appointed by the President in consultation with the Council of State. The Board is chaired by the Minister of Trade & Industry. The board’s main role is to facilitate, regulate and monitor activities in the free zones. The Ghana Free Zones Authority operates on the processing factories.

Export Processing Zones are industrial estates offering special incentives and facilities to manufacturing and related activities aimed mostly at export markets. The World Bank (1992) defined EPZ as “an Industrial Estate, usually a fenced-in area of 10 to 300 hectares that specializes in manufacturing for export. It offers firms’ free trade conditions and liberal regulatory environment.

The GFZ processing zones are the Ashanti Technology Park, the Tema Export Processing zone, Secondi Export Processing Zone and the Sharma Export Processing Zone. Single Factory Scheme offer incentives to individual enterprises regardless of location; factories do not have to locate within a designated zone to receive incentive and privileges. Single factory programmes under GFZA are similar to bonded manufacturing warehouse schemes, although typically offering a broader set of benefits and more flexible controls.

Other leading examples of countries relying exclusively on a single factory scheme include Mauritius, Madagascar, Mexico and Figi. Countries like Costa Rica, USA and Sri Lanka allow both industrial estate-style zones and single factory designations. Nigeria started and licensed about 23 EPF, but cancelled to customs after a long debate with Nigeria customs on the existence of such Programme.

The Michael Okyere Baafi’s Drive:
Mr.Michael Okyere Baafi, is a Chartered Marketer and he holds four Master’s degree in various field of study. Prior to his appointment as the Executive Secretary of the Ghana Free Zones Authority, Mr.Michael Okyere Baafi held various managerial positions for more than ten years, and lately he was the Head of Marketing at the Phoenix Insurance Company. He worked as an adjunct lecturer at the Ghana Institute of Management and Public Administration (GIMPA), and the Accra Technical University.

Upon assumption of office, the celebrated Chartered Marketer outlined visionary strategies to transform the face of the Ghana Free Zone dubbed “managing a public sector with a private sector orientation”. The adopted workable strategies which are already being implemented have in real terms led to increased investor confidence and export led growth, by creating autonomous offices, enhancing the quality of service delivery, and introducing speed as a business strategy. As part, this is to carry out target marketing by identifying key potential investors. In his recent interview with the media, he underscored “the strategy is to well position the GFZA in the international Free Zone and to show a class in the world Free Zones”.

For the first time in the history of the GFZA, Mr.Michael Okyere Baafi is the first to be appointed as Executive Member into the Executive Committee of the Africa Free Zones.

The authority is improving licence application processes, exemption application processes, visa applications and renewal processes, as well as vehicle registration processes.

About eighteen more companies have been listed and licensed into the free zone concept in the field of manufacturing and services. More dormant free companies have been revived under his stewardship.

Under Mr.Michael Okyere Baafi, the authority organised an investment week promotion with the theme, “Export Oriented Industrialisation, key to Ghana’s development”. This brought together the Free Zone Enterprises, potential investors, industry key players, other investment promotion agencies, other stakeholders, and the general public. This created a platform for exhibition and investment discussions with the Executive Secretary, and the two deputies as well as the Deputy Trade and Industry Minister. On this same theme, the authority also launched a new corporate wear to promote its brand awareness and investor confidence.

The Executive Secretary is also employing more staff – who is being trained to provide quality service to licenced free zone enterprises and potential investors.

Also, the authority’s management is embarking on study-tours of other free zone authorities to study their systems; to enable it benchmark its services against those of other countries and also enhance service delivery to all Free Zone Enterprises.

A research and business development unit has also been created to do market intelligence and source new markets for companies that wish to venture into new opportunities and not rely on one traditional market. The unit will also be responsible for reviewing proposals for new businesses and expansion by existing FZEs. To enable the unit have some insight into what the GFZA can do to assist member enterprises, research is being conducted and questionnaires have been distributed to some free zone enterprises.

The CEOs of FZEs have therefore been implored to assist the authority in filling out the questionnaires to help it come up with policies and strategies that will be beneficial to their operations as free zone enterprises.

A new Monitoring Unit has also been set up to monitor activities of free zone enterprises. The unit will be more or less the policing-wing of the Secretariat, to ensure that FZEs’ operations are doing well and CEOs are consciously meeting all the obligations. The policing mandate of the unit will also enable it identify problems faced by free zone enterprises for quick resolution.

The IT Unit of the Ghana Free Zones Authority has also been made more robust, and expanded into a Management Information Systems (MIS) department. It is being worked on to create the needed platforms for implementing a paperless system and ensure that most of the documents, such as quarterly returns, can be submitted online.

Mr.Michael Okyere Baafi’s vision for the Ghana Free Zone Authority continues to expound as he has created another department in the field of Oil and Gas. A feasibility study was carried-out by a team of specialised staff to conduct a research into the oil and gas fields, and now the department is in full operation attracting important attentions from investors.

Furthermore, an immigration desk has been set up to take care of all immigrationrelated issues for expatriates; and emergency visas will be issued within seven days of submitting an application. A schedule of new tariffs and other charges has been instituted – and already been circulated to all free zones enterprises who fail to submit their quarterly reports and audited financial statements to the authority as required by law.

The quarterly reports are expected to be submitted within a month after end of the quarter, and audited accounts within the first quarter of the ensuing year. Same is also applied to companies owe ground rent – and those who have not renewed their licences.

Various specialised training has been provided to the staff in their respective fields both locally and abroad purposely for instilling efficiency and effectiveness in the discharge of their duties. All officers, from the senior manager’s level to the assistant officers have been motivated with increased remunerations and target driven bonuses. To enhance and upgrade staff knowledge, the Executive Secretary in his own benevolent quest have secured scholarship packages for number of employees under his watch to pursue masters and bachelor degree programs in the fields that can help grow the authority.

As part of boosting staff morale, retreat schedules have been instituted at some hospitality and recreational centres in some given quarters of each year. In this retreat, staff will go through a two kilometre health walk, and a health screening exercises. This is aimed at preparing the GFZ officers with a good working attitude in the fulfilment of their mandate to the Authority. Lecture sessions are organised for staff on topics such as “Bonding at workplace”, “effective time management at work place” among others.

Aside periodic management meeting with the Executive Secretary, the Executive Secretary has also instituted a periodic departmental performance review meeting. This is where all officers in each department will meet the Executive Secretary to account and help monitor work in progress and identify other challenges for effective service delivery.

Conclusion
It is quite clear and brilliant that, in just within two years, Ghana Free Zone Authority has seen a monumental growth and facelift following the strategic roadmap set by the celebrated marketer, Mr.Michael Okyere Baafi as the Executive Secretary. Ghana Free Zone Authority with Mr.Michael Okyere Baafi has played an important role in building Ghana’s economy through increased in service delivery to the FZ’s companies.

His strategic ideas have attracted national start-ups and multinational conglomerates. More companies are licensed and more dormant free zone enterprises are revived.

GFZA under Mr.Michael Okyere Baafi generate positive macro and microeconomic impact through value additions.

– Macroeconomic: attraction of FDIs, national recognition, increase in exports, diversification of economy, and creation of employment as well as bigger market-base through inflow of expatriate workforce;

– Microeconomic: improved competition, transfer of know-how as well as greater export orientation and sophistication of local firms.

Many investors have trusted the confidence of the leadership of Mr.Michael Okyere Baafi as the Executive Secretary as he has proven beyond reasonable doubt in taking the Ghana Free Zone Authority to becoming one of the world’s attractive Free Zones.

As part of his long vision for the authority, he has always suggested that, governments must introduce robust policies to promote local entrepreneurship and increase quality of education of local workforce. Without such policies, free zone expatriate companies may eventually dominate local market and distress the local society. Needless to say that the free zone concept has been overhauled and improved over the past few months, therefore, there is no doubt that Mr.Michael Okyere Baafi legacy will last long and GFZ strategic vision remain popular among the policy makers around the world.

By: Abdul-Karim Shamwil
Master’s in Business Planning (SBL UDS-Ghana)

Master’s in Public Administration (USTC-China)

Mini-MBA in Strategic Marketing (IOCB-UK)
Bachelor’s in Development Studies (UDS-Ghana)

Disclaimer: “The views/contents expressed in this article are the sole responsibility of Abdul-Karim Shamwil and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

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