Ghana’s political stability under President Nana Akufo-Addo is cited as one of the reasons why it has performed well in attracting FDI. (Photo by Cristina Aldehuela/AFP via Getty Images)

According to the Ghana Investment Promotion Centre (GIPC), the country’s investment promotion agency (IPA), its foreign direct investment (FDI) flows increased over the first half of 2020, despite the Covid-19 pandemic.

The agency recorded a total of 69 projects with an estimated value of $688.7m between January and June 2020. Out of these projects, FDI corresponded to $627.5m, an increase of 80.4% from the same period in 2019, when flows reached $123.3m.

Services was the sector that brought in the most projects, with a total of 25 out of the 69 recorded. This was followed by the manufacturing sector with 21 projects, and the export trade sector with 11.

Ghana’s strong FDI performance is attributed partly to its economic diversification

The IPA is attributing this “seemingly positive performance of FDI inflows” to the gradual easing of lockdown restrictions set in place to contain the Covid-19 virus, and to initiatives and incentives by the government to “buffer businesses and the economy”.

Ghana’s stability brings in FDI

Ghana’s strong FDI performance is attributed partly to its relatively stable political environment and to its economic diversification, as an exporter of natural resources but not dependent on any single one in particular, according to an EY report on Africa’s economy.

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Some of the business-friendly measures adopted by the government include an extension to due dates for tax filing, a reduction in tariffs on imports or low-interest loans, and a reduction in utility bills.

The GIPC conducted a survey between 1 April to 12 June 2020 on the impact of Covid-19 on foreign investors in Ghana, which pointed at those measures as positives in dealing with the impact of the pandemic on their activity. However, the survey also showed that foreign investors had experienced a revenue loss of $75,000 on average during the second quarter of 2020 because of the pandemic.

Despite FDI flows declining over the first half of 2020 across Africa, according to the UN Conference on Trade and Development, FDI in Ghana seems to be proving resilient. However, the full impact of the pandemic cannot be ascertained yet.