The country remains in the top-ten investment destinations on the continent, thanks to its political stability and investment policies; but it needs to address high energy costs, unstable supply of utilities, weak currency, land tenure issues which complicate acquisition and registration, local content requirements in certain sectors, and corruption.
Prof. John Asafu-Adjaye, Senior Fellow at the African Centre for Economic Transformation (ACET), and Charles Odoom, Head of Private Sector Development at the same institution, said this in a release titled ‘Ghana’s economic outlook: business, trade and economic transformation’ – and lauded efforts aimed at creating opportunities for both local and international businesses as commendable. They however added that, just like in most African countries, more needs to be done.
For instance, despite devastating effects of the COVID-19 pandemic, the year 2020 ended up very encouraging for Ghana with total investment inflows of US$2,796.49million with an FDI value of US$2,650.97million to the country – which is one of the highest in the sub-region, according to the Ghana Investment Promotion Centre.
The FDI component and local components from these investments amounted to US$2,650.97million and US$145.52million respectively for 2020. Total initial capital transfers recorded for the period amounted to US$75.91 million. In all, the FDI value of US$2,650.97million represents an increase of 139 percent over the US$1,108.93million recorded in 2019.
Accordingly, the release said, Ghana as the gateway to West Africa – and Africa as a whole, has one of the fastest-growing economies in the ECOWAS sub-region over the last five years and remains a top destination for investment; largely because of its political stability, low crime rate, respect for rule of law, and comparatively large market. This, the authors also noted, explains why the Kotoka International Airport is one of the busiest in the region, with connecting flights to the rest of the continent and beyond.
More importantly, it said the real strength of Ghana is embodied in its democratic credentials: “Ghana is considered a beacon of democracy in Africa, having successfully organised seven presidential and parliamentary elections and seamlessly transitioned to different governments since 1992. The most recent election was just held in December 2020. It was hard-fought and messy, but stable”.
When it comes to other indicators, it said Accra, the capital city, is rapidly urbanising with strong transport links to other major cities, while the country’s physical and digital infrastructure is among the most developed within the region; with mobile and Internet penetration (about 50 percent in January 2021) also among the highest on the continent.
“It is endowed with abundant natural resources, including vast agriculture and mining; a well-educated populace and a strong middle-class,” the release further added.
“The current administration has prioritised FDI to support economic diversification and industrialisation in key sectors. But there are still sizable challenges in the business environment range: high energy costs, unstable supply of utilities, weak currency, land tenure issues which complicate acquisition and registration, local content requirements in certain sectors, and corruption,” the authors said.