Ghana receives $2.5b, becomes 7th largest recipient of FDIs in Africa, as oil attracts investors
Ghana became the 7th largest recipient of foreign direct investments (FDIs) in Africa at the end of 2010. Investors brought into the country, an amount of $2.5 billion, according to the 2011 World Investment Report.
This was against $2 billion the country received in 2009. Total FDI inflows to Africa for 2010 was $55 billion, representing 10% of total FDI inflows to developing countries.
The report, prepared by the United Nations Conference on Trade and Development (UNCTAD) and released on July 26, 2011, says FDIs into Ghana increased largely because of Trans-National Corporations’ (TNCs) attraction to the oil discovery in the country. Ghana poured its first crude on December 15, 2010.
“As for Ghana, the start of major oil production has attracted the interest of TNCs, some of which are seeking an alternative sub-regional source of oil to Nigeria,” said the report.
The report notes that Ghana as an alternative for these TNCs for FDIs is due to Nigeria’s uncertainty over the “Petroleum Industry Bill-1 which is perceived as unfavourable for TNCs, and the unresolved political problem in the Niger Delta discouraging foreign investors which allegedly led Shell to sell a number of its onshore licences” in the country.
But these situations coupled with the recent happenings in the oil-rich North African countries led to the decline of FDIs to the continent despite the fact that the industry continues to be the largest beneficiary of FDIs.
It accounted for the rise of Ghana as a major host country, as well as for the declines of inflows to Angola and Nigeria, says the report.
Angola was the largest earner of inflows in Africa with an amount of $9.9 billion, followed by Egypt, Nigeria and Libya all earning $6.4 billion, $6.1 billion and $3.8 billion respectively.
DR Congo had $2.9 billion, Congo Brazzaville $2.8 billion; Ghana received $2.5 billion while Algeria, Sudan and South Africa received $2.3 billion, $1.6 billion and $1.6 billion from the continent’s FDI inflows share.
By Ekow Quandzie