The Ghana Investment Promotion Center (GIPC) attracted over $2.6 billion FDI, from 279 projects, which was, expected to create about 27,110 jobs in the country, with the majority of these jobs, earmarked for Ghanaians in 2020. With Ghanian 10-point industrialization plan. The government is going to create many sub regional hubs in sectors such as pharmaceuticals and automotive. Automotive manufacturers, such as Volkswagen, Suzuki, Toyota, Nissan have chosen to set up a plant in Ghana. All these on account of the friendly business climate.
Since the advent of the global health crisis in 2020, greenfield investments in industry and new infrastructure investment projects in developing countries were affected as global flows of foreign direct investment fell by one third to $1 trillion, well below the low point reached after the global financial crisis over ten years ago. The World Investment Report 2021 noted that this is a major concern, because international investment flows are vital for sustainable development in the poorer regions of the world. Increasing investment to support a sustainable and inclusive recovery from the pandemic is now a global policy priority. This entails promoting investment in infrastructure and the energy transition, in resilience and in health care.
Before the global health crisis, Ghana had a GDP growth projection of 6.8%. But post-COVID, this has actually gone down to 0.9%. However, the country is fighting her way through the record of growing her economy with industrialization. The country’s industrial policy has progressively gone through so many diversities from 2017 till recent times, but the notable thing is that in all odds of the COVID-19 pandemic which was an attack on the economy.Finance Minister, Ken Ofori Atta, says the country’s transformation agenda to mitigate the dire effects of the Covid-19 pandemic on the economy is still on course.
Ghana is a resource rich country with abundant raw materials (gold and diamonds, oil and gas, bauxite, iron ore, lithium and manganese, amongst other ornamental minerals). Security, and political stability make it stand out as one of the best locations for investment in sub-Saharan Africa. The investment climate in Ghana is relatively welcoming to foreign investment.As oil production slows further due to maintenance and lower oil prices after the Covid-19 pandemic. However, growth prospects remain positive, with increased output and stable global prices for Ghana’s main export commodities. In 2021, the World Bank projects a growth rate of 3.6 per cent for the Ghanaian economy.
Over the past five years, Ghana had registered 721 foreign direct investments, according to the country’s Information Minister, Kojo Oppong Nkrumah. In 2018, Ghana got $3.3 billion as FDI. FDI in Ghana was at 2.32 billion U.S. dollars in 2019. The foreign investment inflow decreased by 1.17 billion U.S. dollars compared to 2016, when it was at its highest (3.49 billion U.S. dollars). Moreover, FDI represented roughly 3.5 percent of the country’s GDP in 2019, according to Statista.In spite of a sluggish start in the first quarter of 2020 and a worrying slump in the beginning of the second quarter due to severe lockdown measures to contain the spread of the corona virus, FDI to the country have begun to rebound resulting in a notable increase in FDI inflow for the first half of the year. Last year, Ghana account for $2.7 billion as Foreign Direct Investment (FDI).
The present administration is ready with a comprehensive programme to create a million job opportunities for the youth in the next two and a half years. Local initiatives aims to increase productivity and boost output in key primary sectors and value chains. The government’s 10-Point Industrialisation Agenda seeks to expand output through coordinated public and private investment. Programmes targeting higher agricultural productivity include Planting for Food and Jobs, Rearing for Food and Jobs, and Planting for Export and Rural Development. The budding manufacturing sector will broaden the basis for growth, focusing on agriculture-led industrialisation.
Ghana’s industrial transformation through One-Region-One-Park (1R1P). This vision and industrial policy put in place would continue to require a modified shift in national thinking and a policy order to affect the industrial vision of Ghana. Last year, Ghana’s manufacturing sector also saw significant investments, valued at US$170.67 million on the back of some notable ventures, such as a deal by Matrix industries for the manufacture of paper and aluminium products as well as the Rainbow Paints Limited project which is a joint venture between Ghana and Kenya for the manufacturing of paints and related products. Geographically, the spread of the projects cuts across 6 regions – namely, Greater Accra, Central, Eastern, Ashanti and Volta regions with most projects registered in the Greater Accra enclave.
Together, the 69 projects are expected to make significant contribution to job creation in the country. A total of 14,614 jobs are expected to be created when the projects are fully operational. Out of this, 14,052 of the jobs representing 96.15 % will be for Ghanaians whilst the remainder of 562 jobs which represents 3.85% will be taken up by foreigners.
Foreign direct investments may involve acquiring a source of materials, expanding a company’s footprint, or developing a multinational presence. Recently, Twitter announced its plans to open its first African office in Ghana, Hyundai and Kia have also concluded plans to set up an assembly plants in Ghana by 2022. The automobile giants will join Toyota-Suzuki, Nissan, Kantanka, Volkswagen, and Sinotruck who already have plants. The local assembly of vehicles will reduce unemployment in the country by creating 3,600 direct and indirect jobs. While the addition of components and parts manufacturing will also add about 6,600 direct and indirect jobs, according to the Ghanaian Minister for Trade and Industry, Alan Kyerematen. Also, the country recently received a $2.5 billion investment for the setting up an aircraft maintenance repair and overhaul organisation (MRO).
Infrastructure development has the potential to change the lifestyle of the people of any country. The President Akufo-Addo’s government has started constructing 101 hospitals across the country. The government intends each district hospital to cost around $17 million, and be completed in 18 months. Especially in districts without health facilities, six hospitals would be built in the newly created region, and two specialist hospitals would be put up in the middle and Northern belts of the country. This was mooted last year as a result of the Covid-19 pandemic, which laid bare the need for Ghana to upgrade, expand and distribute equitably, health facilities across the country to better handle epidemics of such proportions.
The country was the first in Africa to receive COVID-19 vaccines through the World Health Organization’s COVAX programme in February. Like most developing African countries, Ghana is relying on the COVAX initiative and the African Union, via the African Medical Supplies Platform, for vaccine supply. The country’s target is to vaccinate 20 million people by the end of the year. This would mean effectively vaccinating the entire adult population of the country. Ghana has a population of over 30 million people, vaccinating 20 million people by the end of the year would mean the country has vaccinated its adult population.
The West African nation saw a drop in the energy sector, with approximately close to $324 million projects actually being shelved as a result of the pandemic. Ghana is committed to its SDG 7 goals and had been working towards clean energy in its energy mix through several initiatives and policies, the fact, however, remained that gas, especially Africa’s Liquefied Natural Gas (LNG) was the cleanest of fossil fuel and harnessing it to power generators could make a huge impact on the drive to accelerate universal coverage.
Standard Chartered Bank, in its Opportunity 2030 Report, estimates that some US$7.8 billion in business opportunities exist when it comes to delivering universal access to electricity in Ghana by 2030; the corresponding business opportunities in achieving universal access to sanitation and water supply services and digital access over the period amount to US$0.8 billion and US$6.9 billion respectively. While some US$4.1 billion in private sector opportunities is what it will take to significantly improve infrastructure services by 2030. These are not abstract figures, but commercially viable investment opportunities that will yield beneficial returns to the private sector and create positive impacts on Ghana’s economic and developmental outturn.
Investment summits are another way which countries attract more foreign direct investment. The Information Ministry and the Ghana Investment Promotion Center (GIPC) have launched Spark Up, an investment initiative to promote investments in Ghana’s economy, stimulate growth and move the country forward from the Covid-19 induced setback. This will support government initiatives such as the COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) Programme, the government gave its citizens palliatives and even went as far as giving free electricity for three months to all her citizens during the global lockdown.
Today in Ghana, diversified opportunities had been increased within the AfCFTA market to promote trade and foreign direct investment, create businesses, induce entrepreneurship and transfer new knowledge and skills. Timely policy intervention has help bolster the Ghanaian economy towards a recovery and remains resilient pre and post pandemic. Other African nations need to create a more conducive environment for foreign investors to come in and support our small businesses as they are the fulcrum of any economy anywhere in the globe.