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Ghana’s foreign direct investments (FDIs) hit $4.4 billion in nine months as a result of an aggressive local and foreign investment campaign, Mr Yofi Grant, the Chief Executive of the Ghana Investment Promotion Centre (GIPC), has said.

The amount, which was recorded from January to September 2017, represented 88 per cent of the $5 billion FDI targeted by the centre for this year.
 
The total FDI recorded by the GIPC in 2016 was $2.4 billion, while that of 2015 was $2.7 billion.

Aggressive

“At the GIPC over the years, we have had passive investor promotions, but now we have become more aggressive. We are chasing the investors through trade facilitation and others,” Mr Grant said while delivering a lecture at a business meeting organised by the Institute of Directors in Accra last Tuesday.

The lecture was on the theme: “Foreign direct investment: Making Ghana a preferred choice in Africa”.


He said the centre had projected that the country’s FDI would hit $10 billion by 2020.

The projection, he said, was based on calculations in sectors which the GIPC believed could be very competitive for Ghana, including manufacturing.

He, however, said the country’s local content laws were seen as a hindrance to some investors.

The numbers & countries

The FDIs recorded this year were in sectors such as manufacturing, agriculture, building and construction, services and general trading.

In the first three quarters of the year, 139 projects were registered. The manufacturing sector recorded the highest number of investments with 37 projects, followed by the services sector with 34, while the agricultural sector recorded only one project, and tourism none.

Although China came across as the leading source of investments with 25 projects, followed by India with 19 and the United Kingdom (UK) with 13, it was The Netherlands that registered the highest amount of investment with $2.44 billion, followed by India with $411.75 million.

However, the top countries in terms of investment value in the third quarter of the year were Denmark, France, Poland, Mauritius and South Africa, India and the UK took the lead in respect of the number of projects.

Locally registered investments

On the local investment front, 24 Ghanaian projects were registered during the third quarter of the year.

A breakdown indicates that Greater Accra tops the investment destinations with 18 projects, valued at $217 million, followed by Ashanti with three projects at $2.1 million and Volta with one project valued at $38.38 million.

Local content

According to the GIPC boss, one of the biggest challenges was that although Ghana was on the lips of investors at every investment forum, local content laws were making investors view the country with some skepticism.

He said Ghana’s local content policies must be balanced with those of investors’ countries because of the lack of capital in the country.

“Because of the lack of capital in this country, it is very important that we pay attention to FDI and our attractiveness. We are putting local content in our laws because we want to own the economy, but we also need to balance it with cash investments. The reality is that we do not have the resources,” he said.

He insisted that it was not true that as the CEO of the GIPC, he did not care about local businesses, saying the fact was that 99 per cent of the indigenous businesses that went to the centre did not have the money to finance investment opportunities, adding: “We have not been able to build capital over the past 60 years.”

“No country has been able to develop on its own. FDIs are tools for economic development, despite the fact that we want to increase local content and grow indigenous business,” he added.

Mr Grant said the GIPC believed it was important to develop strong linkages and partnerships with indigenous businesses to enable a clear correlation between investment and economic share growth, adding that it was the reason the centre travelled with some representatives of local businesses to its investment forums outside the country. 

GIPC transformation

Turning attention to what the GIPC was doing to become a pillar for the country’s economic growth, he said the centre was currently going through a number of institutional reforms, including transforming itself from an investment promotion centre to an economic development one.

“The GIPC is creating an information platform, such that it will be easy to highlight investments online, instead of investors going to the centre,” he said.

Additionally, he said, the GIPC was moving towards digitising its operations to ensure that investors anywhere in the world could register their businesses once they met all requirements.

With Ghana slipping from 112th position on the Ease of Doing Business Index in 2016 to 120th in 2017, he said, the government was working hard to position the country as the best place to do business in Africa and top the Ease of Doing Business Index in Africa by 2022.

Making a case for corporate governance, the President of the Institute of Directors, Mr Frederick Ofosu Darko, observed that globally, adherence to a corporate governance system was a pre-condition for economic advancement.

“It is a significant determinant for attracting foreign direct investment,” he said.