Zone Practices: Policy, Planning, and Strategy
193
Box 6.11
Business Focus at Tema To drive forward Ghana’s vision for the development of its free zone program, the government agreed to a deal with Business Focus Ghana, a company owned by Datuk Shah Omar Shah, a well-known Malaysian businessman with close links to Malaysian Prime Minister Mahathir bin Mohamad and his ruling United Malays National Organization party. Business Focus was involved in a number of other investments in Ghana, including at the port (dry dock) and in real estate—they were part of a major wave of Malaysian investment in the country during the mid 1990s. Business Focus acquired 240 hectares in the Tema enclave on a long-term lease and invested approximately US$10 million in land, internal infrastructure, and the development of prebuilt factory and warehouse units in the enclave. The government and the Ghana Free Zones Board (GFZB) saw Business Focus as a company that could attract tenants from Asia through its strong business networks. But relations between Business Focus and the GFZB became strained over disagreements on issues related to infrastructure and service delivery, which slowed down investment in onsite infrastructure. In addition, the combination of the Asian financial crisis (along with capital controls imposed in Malaysia) and high inflation in Ghana had a major effect on the company’s liquidity. According to other developers at Tema, after a long period of dispute with the government, Business Focus stopped paying rent on the land lease. The company eventually sold most of its investments in Ghana, and the Business Focus enclave at Tema now sits on only eight hectares. The failure of this private initiative set Ghana’s free zone program back by many years. Source: Author.
Even when the private sector leads, government has a critical role to play; therefore, effective structures for public-private partnership (beyond the transactional models) are required. Government always plays a critical role in zone programs, even if it is not leading the zone development and operation. In addition to delivering the necessary offsite infrastructure, government must provide the enabling environment and institutional support for private investments. One important lesson from successful zone programs in East Asia is the importance of partnership between the private and public sectors; private firms are the drivers of growth, but government can play the role of catalyst