Pros and Cons of Ghana as a Destination for Foreign Direct Investment

Abstract

This study presents an in-depth analysis of foreign direct investments (FDI) determinants in Ghana. Following the typology of Dunning’s motives of FDI location, they are categorised under the resource-seeking, market-seeking or efficiency-seeking FDI they foster. Literature on FDI drivers in Africa was considered and based on the tendency and/or comparison of the most recent official data (2000-2022), the pros and cons of such determinants were identified. The analysis reveals that Ghana presents a mostly favourable profile to attract resource-seeking and market-seeking FDI but a mixed situation in the determinants of efficiency-seeking FDI. This study adds to the FDI literature by categorising the drivers under Dunning’s motives of FDI and studying the evolution of these factors in a specific developing African country (Ghana) in order to reveal the country’s performance with the determinants. Results show that Ghana’s trend is very positive and can become an attractive market for foreign companies. And government and policymakers should continue in the trend of improving their factors to attract and retain foreign investment.