Ghana sees a 16% investment drop in H1 2023

Ghana’s foreign direct investment (FDI) landscape witnessed a notable shift in the first half of 2023, marked by a 16 percent decline in investment projects, as reported by the Ghana Investment Promotion Centre (GIPC). In a comprehensive review covering the initial half of the year, the GIPC documented 72 FDI projects, a discernible drop from the 86 projects recorded during the same period in the preceding year.

While the quantity of investment projects registered dipped, there was an upward trajectory in the overall estimated value of investments. The total estimated value for the first half of 2023 amounted to $274 million, a significant upswing from the $203 million recorded in the corresponding period of the prior year, signifying a robust 35 percent increase.

Within this financial landscape, the FDI component of investments also demonstrated a noteworthy growth trend. The FDI component, according to the GIPC’s report, surged to $229 million for the first half of 2023, marking a substantial increase from the $187 million recorded during the same period in the preceding year, thereby reflecting a commendable 22 percent rise.

A comprehensive breakdown of the data from the Centre reveals intriguing sectoral dynamics. The manufacturing sector emerged as the frontrunner, recording the highest number of projects during the first half of 2023. This marked a notable departure from the previous year when the service sector claimed the highest number of projects in the corresponding period.

Detailing the sectoral distribution, the report stated, “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.”

Notably, the report also affirms China’s continued prominence as the country with the highest number of FDI projects in Ghana for the first half of 2023, a continuity from the trends witnessed in the preceding year. China accounted for 16 projects in the first half of 2023, down slightly from 19 projects in the same period of the previous year. These investments from China brought in a substantial FDI of $120.10 million.

The report also highlighted the contributions of other nations, with the USA, the Netherlands, Australia, and Mauritius featuring prominently in the FDI landscape. The Greater Accra Region remained the epicentre of FDI projects, accounting for 87.5 percent of all the projects registered in the first half of 2023. Other regions, including Ashanti, Upper East, and Western North, also made significant contributions to the FDI landscape.

The report underscored the potential for job creation, revealing that the 72 projects registered for the first half of 2023 are expected to generate 6,247 jobs. This figure represents a notable increase compared to the 4,066 jobs projected for 86 projects in the corresponding period of 2022. Despite the shifts in investment trends, Ghana continues to demonstrate its allure as a destination for foreign direct investment, with evolving sectoral dynamics shaping its economic landscape.