Foreign Direct Investment Inflows in Ghana: Is There Any Political and Priority Influence in the Distribution among the Sectors and Regions of the Ghanaian Economy?

Abstract

Political influence is taking certain vital role in foreign direct investment (FDI) inflow operations on the account of economic growth and development on Ghana's economy. To determine whether there has been any political and priority influence in the distribution of FDI registered projects over the past years, perceived strongholds of some regions in terms of presidential and parliamentary elections were considered. Using descriptive statistics approach which promotes the examination of the leverage of foreign direct investment in a quantitative mode based on the data collected from the Ghana Investment Promotion Centre between 2013 and 2017, it was realized that, these perceived strongholds of some regions received less or none of the registered projects through foreign direct investment. However, regions like the Upper East and Upper West, political strongholds of the National Democratic Congress (NDC) recorded no registered projects between 2012 and 2016 during the NDC's term of governance reflecting less or no political influence in the distribution of the registered projects accumulated through FDI. It was also revealed that, the service sector has been receiving much of the FDI projects due to its greater percentage share contribution to Ghana's gross domestic product (GDP). It is suggested that, FDI registered projects should not be centered in Greater Accra alone if the country needs a universal and equal development across the various regions.

Τhe effect of foreign direct investment on economic growth in Ghana: the role of exchange rate volatility

“…The benefits include the stimulation of economic growth, trade improvement and employment opportunities. (Evans, Kesse, Gladys, & Nyamoto, 2018;Antwi, Mills, Mills, & Zhao, 2013). In over the years Ghana has used extensively, tax and non-tax incentives to woo foreign investors to the country.…”

“…Presently, the Ghana government policy of "one district, one factory" has become a significant catalyst for FDI inflows into the country. Studies such as Nketsiah and Quaidoo (2017), Adams and Opoku (2015), Nyarko et al (2011) Mmieh andOwusu-Frimpong (2004), Antwi et al (2013), Evans et al (2018) had attempted to identify the effect of FDI on economic growth whereas Aliyu (2010), Alagidede and Ibrahim, (2017), Ullah et al, (2012), Wijeweera, Villano and Dollery (2010), Kyereboah-Coleman and Agyire-Tettey (2008), Kiliçarslan (2018), looked at the effect of exchange rate volatility on economic growth. The aforementioned studies failed to look at the moderating role of exchange rate volatility on the FDI-growth nexus.…”