Investment in Ghana: An overview of FDI components and the impact on employment creation in the Ghanaian economy

Title: Investment in Ghana: An overview of FDI components and the impact on employment creation in the Ghanaian economy
Issue: Vol 5 No 1 (2020)
Published date: 15-04-2020 (print) / 15-04-2020 (online)
Journal: Economics, Management and Sustainability
ISSN: 2520-6303
Authors: Evans Yeboah
Nanjing University of Science and Technology, 200 Xiaolingwei Street, 210094, Nanjing, Jiangsu Province, China

Lucy Anning
Accra Institute of Technology, 34 Concam Cres, Accra, Ghana
Keywords: FDI component, local currency component, total cost, employment, economy, Ghana
DOI: 10.14254/jems.2020.5-1.1
Language: English
Pages: 6-16 (11)
JEL classification: E22, F21, O16

As foreign direct investment provides a new way for many countries to improve their economies with Ghana not being an exemption. The source of FDI countries looks on to give Ghana a new way of advancement. This study provides a general overview on the inflow of foreign direct investment to Ghana. By considering FDI component values, local currency values, the overall number of projects registered and employment creation to investigate their significance in Ghana’s economy. This study makes use of the descriptive statistical method that promote data analysis in a quantitative way. The results revealed that, FDI component contributes heavily to the total foreign direct investment values in Ghana. The outcome also shows that, of the whole number of registered projects, about 72.10% were wholly-foreign owned but in the aspect of the aggregate cost of these projects, the value of joint ventures (between Ghanaians and their foreign counterparts) weigh higher than that of wholly-foreign owned businesses. The result further indicates that, on the account of employment creation, Ghanaians enjoyed about 85% of the total jobs to be created. It is suggested that the government of Ghana should encourage its citizen to contribute more to investment.


1. Baba, I. (2013). Foreign direct investment inflows and economic growth in Ghana. International Journal of Economic Practices and Theories, 3(2).

2. Decai, T., & K, B. (2012). China – Africa foreign trade policies: the impact of China's foreign direct investment (FDI) flow on employment of Ghana. 2012 International Conference on Future Energy, Environment, and Materials. 16, pp. 553-557. Energy Proced

3. Dr. John, A. (2005). What has been the impact of foreign direct investment in Ghana?. IEA Policy Analysis. The Institute of Economic Affairs, 1(9).

4. Francis, G., Mary, O., & Jonatha, K. E. (2013). Foreign direct investment and gross domestic product in Ghana. International Journal of Academic Research in Accounting, Finance and Management Sciences, 3(3), 256-265.

5. George, O.-A., James, A., & Peter, K. (2013). Foreign direct investment: A journey to economic growth in Ghana - Empirical Evidence. International Business & Economics Research Journal, 12 (5).

6. IMF. (1993). Balance of Payments Manual, 5th edition. Washington D.C: International Monetary Fund.

7. Joseph, Y. A. (2015). Chinese Investment in Ghana. Argumenta Oeconomica Cracoviensia, (13), 61-81.

8. Justice, G., & Gloria, C. (2012). Determinants and effects of foreign direct investment in Ghana – Review of literature. Developing Country Studies, 2(11).

9. Kusi, G. (2013). Regulatory Framework for Investing in Ghana. Ghana Investment Promotion Centre.

10. Kwasi, B.-G., & Yao, L. (2017). FDI trends in Ghana: The role of China, US, India and South Africa. Eurasian Journal of Economics and Finance, 5(2), 1-16.

11. OECD. (2008). OECD Benchmark definition of foreign direct investment. In OECD, OECD Benchmark Definition of Foreign Direct Investment (4th ed., pp. 62-64). Paris: OECD.

12. Prince, A., & Victor, O. (2014). Foreign Direct Investment (FDI) Inflows into Ghana: Should the Focus Be on Infrastructure or Natural Resources? Short- Run and Long -Run Analyses. International Journal of Financial Research, 5(1).

13. Romer, P. (1986). Increasing returns and long run growth. Journal of Political Economy, 94(5), 1002-1037.

14. Samuel, K. F. (2012). Research on Relationship between China and Ghana: Trade and Foreign Direct Investment. Journal of Economics and Sustainable Development, 3(7).

15. Tee, E., Larbi, F., & Johnson, R. (2017). The Effect of foreign direct investment (FDI) on the Ghanaian economic growth. Journal of Business and Economic Development, 2(5), 240-246.

16. Unctad. (2012). World investment report: Towards a new generation of investment policies. New York and Geneva: United Nations Conference on Trade and Development.

17. UNCTAD. (2008). World Investment Report: Transnational Corporations and the Infrastructure Challenge. New York: United Nations Conference on Trade and Development.