FDI to Ghana in 2022 drops to $1.5b from $2.6b in 2021

Foreign Direct Investment (FDI) to Ghana in 2022 has dropped considerably, as compared to that of 2021.

FDI to Ghana dropped from $2.6 billion the previous year to $1.5 billion in 2022, a drop of 42.3 per cent. The 2021 figure was a 39.34 per cent increase from the 2020 figure of $1.88 billion.

FDI from the US to Ghana amounted to $421 million in 2021. 

According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report for 2023 FDI flows to the entire African continent declined to $45 billion in 2022 from the record $80 billion in 2021. From that figure, Africa accounted for 3.5 per cent of global FDI.

However, the report indicates that the number of greenfield project announcements rose by 39 per cent to 766, and six of the top 15 greenfield investment megaprojects (those worth more than $10 billion) announced in 2022 were in Africa.

It said in West Africa, Nigeria saw FDI flows turn negative to -$187 million as a result of equity divestments. Whereas, announced greenfield projects, rose by 24 per cent to $2 billion. Flows to Senegal remained flat at $2.6 billion and FDI flows to Ghana fell by 39% to $1.5 billion.

The UNCTAD report for 2023 also notes that over the past five years, FDI inflows have risen in four of the regional economic groupings in Africa.

It says FDI in the Common Market for Eastern and Southern Africa grew by 14 per cent to $22 billion. Flows rose also in the Southern African Development Community (quadrupling, to $10 billion), the West African Economic and Monetary Union (doubling, to $5.2 billion) and the East African Community (up 9 per cent, to $3.8 billion).

It further indicates that intraregional investment remained relatively small, despite an increase over the past five years. In 2022, intraregional greenfield project announcements represented 15 per cent of all projects in Africa (2 per cent in terms of value), as compared with 13 per cent (2 per cent in value) in 2017.

“However, looking at announced projects invested in by only African multinational enterprises, three quarters of their value remained on the continent,” it added.

It said in 2022, the biggest increase in announced greenfield projects was in energy and gas supply (to $120 billion from $24 billion in 2021). Project values in construction and extractive industries also rose, to $24 billion and $21 billion, respectively. The information and communication sector registered the highest number of projects.

“International project finance deals targeting Africa showed a decline of 47 per cent in value ($74 billion, down from $140 billion in 2021) but a 15 per cent increase in project numbers, to 157.

European investors remain, by far, the largest holders of FDI stock in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion),” it said.

By Emmanuel K Dogbevi
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