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Why are Local Equity Participation Requirements (LEPRs) important in Ghana’s economy?
How do we strike a strategic balance between upholding LEPRs and promoting critically required foreign direct investment (FDI)?
How can the promotion of LEPRs be advanced in the context of a lack of local capital depth?

These key concerns draw attention to the important interactions that exist between attracting FDI and promoting the growth of the local investment in our economy. Overcoming these obstacles is crucial to maximising FDI potential and promoting inclusive, sustainable growth for all Ghanaians.

This article explores the potential benefits and implications of mandating companies with LEPRs in various sectors to list on the Ghana Stock Exchange (GSE). This strategy will ensure broader Ghanaian ownership and participation by making shares in critical sectors accessible to a wide range of local investors. Leveraging the GSE can significantly enhance the effectiveness of LEPRs. When such companies are required to list on the GSE, shares become available to indigenous retail investors, pension funds, and other institutional investors, thereby democratising investment opportunities and fostering a culture of local ownership. Additionally, listing on the GSE increases transparency and accountability, which can attract more investors and boost market confidence.

The proliferation of FDI in any developing economy is a welcome development. The inflow of capital leads to job creation, infrastructure development, human capital development, and fiscal benefits to help support essential government services.

However, to ensure that the benefits of FDI are maximised and equitably distributed, many countries implement localisation policies. Localisation involves ensuring that local businesses, workers, and resources are significantly integrated into sectors traditionally dominated by foreign entities. Key elements of localisation include:

• Local Content Requirements: which are regulations that mandate that a certain percentage of goods, services, and labour used in a particular industry or project must come from local sources; and
• LEPRs: which are policies that require a specified portion of ownership or equity in businesses, especially in critical sectors like mining, oil and gas, and telecommunications, to be held by local investors or the government. This ensures that a share of the profits and decision-making stays within the country.
In Ghana, these policies aim to ensure that the economic benefits of key industries such as oil and gas, mining, fintech and telecommunications are shared with local businesses and citizens, promoting sustainable economic growth and development. Specific targets for local content and participation are set, which foreign companies must meet to operate within the country.

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