Ghana’s FDI Declines In First Half Of 2023

A report for the first half of the year showed that Ghana has experienced a decline in its Foreign Direct Investment (FDI) as the Ghana Investment Promotion Centre (GIPC) recorded a 16 percent drop in investment projects in the first half of 2023.

According to the report, the GIPC registered 72 FDI projects compared to 86 projects in the same period last year. However, the total estimated value of investments for the first half of 2023 was $274 million compared to $203 million, which represented a 35 percent increase.

The FDI component, according to the report, for the first half of 2023 was $229 million, up from $187 million in the same period last year, which showed a 22 percent increase.

A sectoral distribution of the data from the Centre revealed that the manufacturing sector recorded the highest number of projects in the first half of 2023, in contrast to the service sector recording the highest number of projects in the same period in the previous year.

The report stated that out of the 72 projects registered, the manufacturing sector, with 32 projects, recorded the highest number of projects. It was followed by services and export trade, with 25 and 7 projects, respectively. “General Trade recorded 4 projects, while the building and construction sector recorded 2 projects. The agriculture and liaison sectors registered one project each,” the report stated.

Highest Number

Consistent with the first half of 2022, China remains the country with the highest number of FDI projects in Ghana in the first half of 2023. The report stated that China recorded 16 projects in the first half of 2023, down from 19 projects in the same period last year.

“China with 16 projects brought in FDI of US$120.10 million, the USA with 9 projects brought in FDI of US$19.50 million, the Netherlands with 1 project brought in FDI of US$16.88 million, Australia with 4 projects brought in FDI of US$14.4 million, and Mauritius with 2 projects brought in FDI of US$11.06 million” part of the report reads.

The Greater Accra Region continues to be the region with the highest number of FDI projects as it recorded 63 projects, accounting for 87.5 percent and 72 percent of all the projects registered in the first half of 2023 and 2022, respectively.

The other regions are Ashanti with seven projects, and the Upper East and Western North regions record one project each.

In terms of jobs created in the years under review, the report stated that 72 projects are expected to create 6,247 jobs in the first half of 2023, while 86 projects were expected to create 4,066 jobs in 2022.

However, this report is in stark contrast to UNCTAD’s World Investment Report 2022, which stated that FDI inflows to Ghana increased in 2021, thanks to projects in extractive industries. According to UNCTAD’s Investment Trends Monitor, global FDI momentum weakened in 2022 in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures. Ghana’s top investing economies are South Africa, the Netherlands, France, Mauritius and China (IMF, FDI position).