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FDI to Ghana increased in the first half of 2020, says report

GIPC’s second-quarter report says the UK was the country with the single largest flow of foreign direct investment value to Ghana

Foreign direct investment (FDI) flow into Ghana during the second quarter of 2020 has differed from the expected global trend of decline, resulting in a significant increase in FDI for the first half of the year.

The FDI value of US$627.52 million was an increase of 409.10% over the FDI of $123.26 million recorded in the first half of 2019, the Ghana Investment Promotion Centre (GIPC) said in its second-quarter report.

GIPC recorded a total of 69 projects, at a total estimated cost of US$688.74 million in the first half of 2020.

Out of this, the FDI component amounted to $627.52 million and local components to $61.22 million.

Jobs in the offing

According to the report, the total initial capital transfers recorded for the period ran to $55.75 million.

The investments recorded by GIPC in the first half of 2020 prospectively will generate a minimum of 14,614 jobs.

The report said 14,052 (96,15%) of these jobs generated will go to Ghanaians and the remaining 562 (3.85%) will be for non-Ghanaians.

Sources of investment

China was the leading source of investment in terms of registered projects in Ghana.

Chinese investors registered 12 projects in the first half of 2020.

In terms of FDI value, the United Kingdom, with $238.9 million, was the country with the single largest investment into Ghana.

Sectoral distribution

With 25 projects, the services sector recorded the highest number of projects out of 69 registered, the report says.

Manufacturing and export trade followed next, with 21 and 11 projects respectively.

In terms of estimated costs of investment, general trading recorded the largest value – $246.05 million.

This was followed by mining exploration (with an estimated cost of $231.02 million) and manufacturing $170.67 million.

More investors coming

In July the chief executive officer of GIPC, Yofi Grant, speaking on Asaase Breakfast AM, said that his office receives a stream of calls from investors eager to come to Ghana to explore opportunities even as economies around the world suffer the effects of the novel coronavirus pandemic.

“We still keep getting calls every day,” he said. “I am inundated with virtual meetings because people want to know what we are doing, and what they want to know is what Ghana is doing. After all, we seem to be doing something right …”

CARES programme

To help Ghana survive the effects of the pandemic and thrive, the government is implementing the Ghana Coronavirus Alleviation and Revitalisation of Enterprises Support (Ghana CARES) programme.

This is a three-and-a-half-year recovery and revitalisation programme involving an investment of GHC100 billion, 70% of which the government expects the private sector to fund through investment.

The Ghana CARES programme is expected to have an impact on every facet of Ghanaian life and set the economy on the path to recovery.

According to the World Investment Report 2020, published by the United Nations Conference on Trade and Development (UNCTAD), global FDI flows could fall by as much as 40% this year and decrease by a further 5-10% next year.

Although prospects for African countries suggested that 2020 would have been an auspicious year, with growth projected to rise from 2.9% in 2019 to 3.2% in 2020, and 3.5% in 2021, the coronavirus disease has changed this narrative beyond all recognition.

Based on current growth projections, UNCTAD forecasts a decline in FDI of between 25% and 40% in the African region.

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