Ghana’s FDI Plummeted In 2023

Ghana’s investment climate in 2023 experienced a decline in Foreign Direct Investment (FDI) compared to previous years. 

According to the Ghana Investment Promotion Centre (GIPC) Quarterly Investment Report for the Fourth Quarter of 2023, total recorded investments from January to December 2023 reached US$663.18 million across 122 projects.

This figure marks a decrease compared to the US$1.35 billion FDI recorded in 2022, and the US$1.29 billion recorded in 2021. This indicates a waning confidence in Ghana’s business environment among international investors.

The report details a breakdown of project ownership, revealing that 90 projects were wholly foreign-owned, while 32 were joint ventures between Ghanaians and foreign partners.

Services Drive

The report identified the manufacturing sector as the biggest recipient of investments, attracting 50 projects with a combined value of US$280.24 million.

This is followed closely by the services sector, which secured US$226.29 million across 43 projects. These figures highlighted Ghana’s potential as a manufacturing and services hub within the region.

“The manufacturing sector recorded the highest number of expected employment with a total of 4,534 jobs,” the report emphasizes. This significant job creation within the manufacturing sector positions Ghana as an attractive destination for businesses seeking skilled labor and a growing domestic market.

Investments

While the Greater Accra region emerged as the leader in attracting projects, securing 105 projects or 86% of the total, the report highlighted a positive trend of investment diversification across the country.

This concentration in Accra might be attributed to the presence of established infrastructure and a skilled workforce in the region. However, it’s important to note that investments reached seven other regions, including Ashanti, Upper East, Western North, Western, Northern, and Bono East.

This signals a potential for broader economic development and a more geographically balanced distribution of investment projects in the future.

Top Investor Sources

China stood out as the leading source of investments in 2023, contributing 31 projects valued at US$211.89 million (highest FDI). The United States and India followed closely behind, with US$26.39 million and US$77.93 million invested across 14 and 13 projects, respectively.

This diversity in investor sources underscores the global appeal of Ghana’s investment opportunities, attracting companies from established economies alongside emerging markets.

“These investments are projected to generate a total of 13,523 jobs at full operational capacity,” the report states.

“Of these, 12,065 jobs representing 89.22% are earmarked for Ghanaians, while the remaining 1,458 jobs representing 10.78% will be for non-Ghanaians.”

GIPC Quarterly Investment Report

Additional Indicators

The report also detailed additional factors that contributed to Ghana’s 2023 FDI.  For instance, it highlighted that twenty-nine existing companies brought in additional equity totaling US$28.56 million during the period.

Furthermore, capital equipment amounting to US$351.15 million was recorded from ongoing investment projects by Sentuo Oil Refinery and Continental Blue Investment Ghana Limited (CBI).

These figures showcased the confidence existing investors have in the Ghanaian market and their commitment to expanding their operations within the country.

While Ghana’s current FDI performance is not the best compared to the last two years, addressing the decline is crucial for sustained growth.

The government’s continued efforts to improve infrastructure, streamline regulations, and foster a business-friendly environment will be essential in attracting greater foreign investment flows and solidifying Ghana’s position as a competitive investment destination within Africa.