Despite the inevitable dampening effects of COVID-19 on Foreign direct investment commitments worldwide, Ghana was able to achieve a partial recovery during the first half of 2020, from the dismal performance during the corresponding period of 20I9.
The reasons for the very bad performance for the first half of 2019, when Ghana got commitments to the tune of a paltry US$123.26 million, have still not been understood – indeed it defies credible explanation – and until the start of June this year itseemed a repeat was on the cards although for understandable reasons, this being the impact of the coronavirus pandemic on investor sentiments.
However, some major commitments received in June, by which time it was becoming clear that Ghana had navigated clear of the worst impacts of COVID-19 as being experienced in many other countries around the world, took total investments to US$869.47 million for the first half of this year, according to the Ghana Investment Promotion Center.
Foreign Direct Investment component was estimated at US$785.62 million between January to June 2020 as FDI inflows showed rare strength in the final weeks of the second quarter of the year, despite COVID-19 pandemic.
Globally, the United Nations Conference on Trade and Development (UNCTAD) has estimated that the COVID-19 pandemic global FDI will plunge by about 40 percent this year – driving the total value of FDI below US$1 trillion for the first time since 2005.
However, in spite of a sluggish start in the first quarter of 2020 and a worrying slump in the beginning of the second quarter due to severe lockdown measures to contain the spread of the coronavirus, FDI commitments into Ghana have begun to rebound resulting in a notable increase in FDI inflow for the first half of the year.
At the GIPC, a total of 69 projects with a total estimated value of US$688.74 million were recorded by the end of June 2020.
Of this, the total FDI component amounted to US$627.52 million while local component accounted for an estimated US$61.22 million.
The FDI value of US$627.52 million was a considerable increase of about 409.10% from last year’s FDI value of US$123.26 million recorded within the same period (Jan-Jun 2019), depicting a strong performance irrespective of the global pandemic.
But considering that by 2017 and 2018, GIPC was regularly attracting well over US$3 billion a year, there is not much euphoria in the offices of the Centre over this.
Rather, GIPC’s senior officials are busy plotting a course back to the FDI levels that enabled Ghana to overtake Nigeria’s much larger economy, in 2018, as the most preferred destination in West Africa for FDI.
GIPC has set itself a target of US$5 billion a year.
Out of the 69 projects recorded, the services sector registered a majority of 25 projects followed by the manufacturing and export trade sector with 21 and 11 projects respectively.
With regards to value, general trading recorded the highest amount of US$246.05 million.
This was closely followed by the mining exploration sector with S$231.02 million having sealed some major investments such as the Chirano Gold mine project for the exploration of minerals.
The manufacturing sector also saw significant investments valued at US$170.67 million on the back of some notable ventures such as a deal by Matrix industries for the manufacture of paper and aluminum products as well as the Rainbow Paints Limited project which is a joint venture between Ghana and Kenya for the manufacturing of paints and related products.
Geographically, the spread of the projects cuts across six regions namely, Greater Accra, Central, Eastern, Ashanti and Volta regions with most projects registered in the Greater Accra enclave.
Together, the GIPC said 69 projects are expected to make significant contribution to job creation in the country.
Per estimations, a total of 14,614 jobs are expected to be created when the projects are fully operational.