FDI Inflows: Ghana ranked second highest recipient in West Africa
FDI flows to Ghana increased by 39% to $2.6 billion for the year 2021, according to the World Investment Report 2022. This placed Ghana 2nd in West Africa, and 7th in Africa, in terms of FDI attraction.
The rise in Ghana’s FDI flows was attributed to major projects in its extractive industries, which included; the construction of an $850 million gold mining facility by Newmont Corp, and the construction of a cement factory by Ciment d’Afrique (CIMAF) for $436 million.
The increase in FDI flows reflects the findings of the Deloitte 2022 Africa Investment Attractiveness Index, which placed Ghana as the second most appealing destination for investments in Africa based on the comments of nearly 200 CEOs.
“Ghana has a great global reputation, and as the host of the African Continental Free Trade Area, it provides considerable opportunities for businesses to trade in the enormous African market. Furthermore, with our democratic stability and smart business policies in place, such as the 10-Point Industrialization Agenda, Ghana most appeals to investors seeking stability and vibrancy in order to prosper and grow their firms. So, despite the current economic difficulties, investors continue to see Ghana as a desirable destination to invest”, said Yofi Grant CEO of the GIPC.
In recent years, the government through the GIPC has made FDI attraction a priority by improving investment attraction strategy to a more proactive one. It has also spurred private sector investment through the Ghana Covid 19 Alleviation and Revitalization of Enterprises (CARES) program – a 100bn Ghana Cedis economic response program, aimed at supporting the private sector in targeted sectors, to accelerate growth and stabilize the Ghanaian economy.
In addition to encouraging private sector investments, the government has been working to eliminate regulatory discrepancies among several state agencies that create unnecessary barriers to doing business. The GIPC for instance, has digitized its registration procedure, making it considerably quicker and more flexible for investors to register and apply for exemptions under the GIPC Act (Act 865).
“It is essential to note that Foreign Direct Investment in an economy like ours is crucial for creating jobs, gaining access to new technologies, increasing output, expanding trade, and forming valuable relationships between local enterprises and multinational corporations. As such the GIPC will not relent in promoting Ghana as a choice destination for investment and assiduously engaging with global partners”, noted Mr Grant.
Overall, the World Investment Report indicated that FDI flows to Africa reached $83 billion, a record high, up from $39 billion in 2020, representing for 5.2% of global FDI.
Meanwhile, FDI into the West African Subregion increased by 48% to $14 billion. Neighboring Nigeria were the highest beneficiaries with FDI flows doubling to $4.8 billion, mainly because of the resurgence in oil investment and expansion in gas.
For the rest of 2022, the World Investment Report predicts that FDI flows to developing economies are expected to be strongly affected by the war in Ukraine and its wider ramifications.
