The Changing Pattern and Future of Foreign Investment Law and Policy in Ghana: The Role of Investment Promotion and Protection Agreements

Abstract

This article assesses the implications of investment promotion and protection agreements (ippas) for domestic investment law and policymaking in Ghana. It reviews the terms of domestic investment legislation prior to and after Ghana entered into ippas to ascertain the differences in the content of domestic laws and the role of the ippas in the changing pattern of foreign investment law and policy in Ghana. The review shows fundamental differences. Whereas, for example, under the pre-investment treaty domestic investment laws, a proposed investment could be admitted only if it would contribute to the national economy, the post-investment treaty domestic investment law requires only minimum capital for admission. What explains the fundamental change in the content of the post-investment treaty domestic law? The literature reveals that the change in government policy from a regulatory to a more investment promotion-oriented policy explains the shift in the content in investment law in Ghana. The post-investment treaty domestic law was enacted against the backdrop of structural adjustment policies that emphasised liberalization. The article argues complementarily that the coming into force of the ippas of Ghana also explains the changing pattern in the content of domestic investment law. Given the definitions of investment and the substantive obligations under the ippas, Ghana could not, even without independent policy change, retain the content of domestic investment law as was the case when she was not party to any ippas. The thesis is that ippas have the effect of limiting regulatory autonomy and will limit future legislative powers of the State in defining the content of domestic investment law and policy. This will ultimately determine the pattern and trend of domestic investment law and policy in Ghana. The article proposes that the ippas should be renegotiated to take into account the constitutional responsibility of the Government to protect the welfare of the people of Ghana.