Ghana has attracted a total of US$12.1 billion Foreign Direct Investment (FDI) inflows into the country between 2017 and 2020. This means the country’s investment climate is still doing well despite some setbacks in the country’s efforts to attract more FDI to develop the economy. FDI inflows constitute a significant component in assessing the health of every country’s economy.
Despite the huge prospects for Ghana in attracting FDI inflows, available data shows a declining trend in the inflows even before COVID-19 struck. Data from the Ghana Investment Promotion Centre (GIPC) show that Ghana received about US$4.9billion worth of FDI in 2017. However, this dropped to US$3.5billion in 2018 and further dipped to US$1.1billion in 2019.
However, despite the COVID-19 pandemic, the country’s FDI inflows grew year-on-year by136% in 2020. More specifically, Ghana attracted US$2.6 billion of Foreign Direct Investment in 2020. The Chief Executive Officer (CEO) of the GIPC, Mr. Yofi Grant attributed the sterling performance to the confidence in the Ghanaian economy as a result of government’s prudent economic management.
“President Akufo-Addo is working to market the country and build an efficient brand; a critical stepping stone on which the GIPC has been using to drive its investment agenda.
“It is important to emphasis that the GIPC is complementing the President, who is pitching the investment potential of Ghana to the rest of the world”.
FDI Inflows in first 6 months
Meanwhile, Mr. Grant indicated that FDI inflows in the first half of 2021, January to June, has amounted to US$780 million. This is against the GIPC’s target of US$3 billion inflows by the end of the year. All things being equal, Ghana may meet the billion-dollar target and probably exceed it.
Meanwhile, Mr. Grant highlighted that the GIPC is working tirelessly to ensure it attains its target for the year. He indicated that seeking for investment is not just an event. According to him, it is a process that requires patience and concerted efforts to market the country and build a pleasant image globally.
“Our confidence is based on the fact that we are clear on who we are speaking to and what outcome to expect. Attracting investment is a long process requiring lots of actions and measures, which include country branding”.
Also, the GIPC Boss noted that to attract investment, the country must give investors the opportunity “to also do their own due diligence and make their final decision”.
Effects of FDI on the Economy
The GIPC expects the FDI inflows to boost investments in agribusiness, pharmaceutical, manufacturing and industry. It can also go into other sectors of the economy to create jobs and spur socio-economic development.
In order to continue to attract FDI inflows, the country must continue to demonstrate to potential investors that their investment will be safe in the country. Already, the Institute for Economics and Peace ranks Ghana the second most peaceful country in Africa in its 2021 Global Peace Index report. All this sends a good signal to investors.
However, the recent attack on bullion vans in the country highlights some weaknesses in the country’s security. Corruption must also go down drastically to give a better picture of the Ghanaian economy to potential investors.
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