Ghana’s Free Zones was established to develop Ghana into a hub for manufacturing and processing through value addition for export. The Programme focuses on development through exports, to encourage both local and foreign investors to produce goods and services for export-oriented development. Through this, Ghana can gradually, move away from an exporter of raw materials to an exporter of value added goods and services to enable her compete keenly with other emerging economies to gain an entrenched position in the global marketplace.

The objectives of Ghana’s Free Zones as provided for by the Free Zones Act 1995 (Act 504) are as follows:

• Promotion of economic development
• Attraction of Foreign Direct Investment
• Creation of employment opportunities
• Increasing foreign exchange earnings
• Provide business opportunities for local and foreign investors
• Transfer of technology
• Enhancement of technical and managerial expertise of Ghanaians

Free zones have become increasingly popular as trade promotion policy instruments, especially in developing countries, to the point where in some developing countries a large proportion of their exports originate in free zones. In 1992, the World Bank defined export-processing zones as ‘fenced-in industrial estates specializing in manufacturing for exports that offer firms free trade conditions and a legal regulatory environment’. This concept has evolved and rules on domestic sales and the physical delimitation of the zones have in some cases become more flexible. Nevertheless, the objectives pursued by countries that use free zones have remained constant. These objectives include: development of disadvantaged regions, generating income and employment, attracting investment – especially foreign direct investment, and promoting technology transfer. The objectives listed above are usually incentives to companies and firms operating in those zones. These incentives are commonly of a physical nature (tax breaks and exemptions), regulatory nature (flexible rules on importation and labour).

When looking at the benefits granted to enterprises operating in a free zone, it is difficult to generalize since the different types of incentives and benefits of a free zone can vary from country to country or even within countries. Nevertheless, some benefits and incentives can be identified as:

• Exemption in payment of import duties and charges on all imported
  goods usually in the form of machinery, raw materials and all inputs for
  production.
• Total or partial exemption from the payment of direct and/or indirect taxes
• Full or partial exemption from payment of fees and charges payable to the government in connection with exports.

Governments may directly or by entrusting a private company, provided goods or services to enterprises located in a free zone at prices below those paid in the rest of the market.

The main idea of establishing Ghana’s Free Zones is to develop Ghana into a hub for manufacturing and processing through value addition for export. The Free Zones Programme focuses on development through exports, to encourage investors (both Ghanaian and Foreign) to produce goods and services for export-oriented development.

Through this, Ghana can gradually, move away from an exporter of raw materials to an exporter of value added goods and services to enable her compete keenly with other emerging economies and entrench our position in the global marketplace.