B&FT: FDI’s likely to get a hit by COVID-19

Closely related to the topic above, the Coronavirus outbreak has already seen global stocks losing over US$3trillion just before end of the first quarter of 2020, and some experts are foreseeing some sort of global recession.

This view is also creating great concern for the Ghana Investment Promotion Centre (GIPC), which harbours fears that the outbreak could hugely impact inflows of foreign direct investment to the country.

The Coronavirus (COVID-19) outbreak could cause global foreign direct investment (FDI) to shrink by 5% - 15%, according to an UNCTAD report published on 8 March. COVID-19’s negative impact on investments will be felt strongest in the automotive, airlines and energy industries, the report says.

“The ripple-effect could cause a major setback to efforts of governments around the globe to attract the private investments needed to achieve sustainable development objectives,” said UNCTAD Secretary-General Mukhisa Kituyi.

Therefore, Mr. Grant’s fears are genuine and there might be a need to tone down the country’s high expectations for increased foreign direct investment (FDI), especially as the outbreak has seen President Akufo-Addo ban government officials from foreign travels for a month – unless sanctioned by the Chief of Staff at the Presidency.

Additionally, many countries have banned large gatherings – and even the USA has banned travel from the EU bloc in view of the seriousness of the outbreak there. Business activity is taking a hit globally, and as a country, we need to brace up to that and be measured about economic prospects.

In saying this, however, we recognize that every misfortune comes with opportunities; and this outbreak presents a perfect opportunity for the country to realise its vision of a ‘Ghana Beyond Aid’. Let us consume more local rice, poultry and other consumables and we will get along.