The determinants of foreign direct investment inflows in Ghana.

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May, 2016
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The main aim of the study was to examine the major determinants of foreign direct investment in Ghana. The study employs time series annual data on FDI, GDP per capita, Economic Openness, Exchange Rate, Political rights, Government Consumption Expenditure, Macro Economic Stability, and Natural Resource Endowment and Interest Rate from Ghana over the study period 1980 to 2014. Also openness of the nation’s economy and market, and natural resources, its infrastructure, the size and level of governments expenditure and consumption and also the interest rate regime in the nation were the factors that determines Ghanas FDI. In summary Foreign Direct Investment (FDI) in Ghana is much concentrated in the mining and oil and gas sector at the expense of the fundamental drivers of Ghana’s economy, therefore FDI becomes less impactful on Ghana’s economic growth. Ghana’s attraction of foreign direct investment hinge on major factors mentioned earlier above. The study recommended that government must create the enabling socio-economic and political environment with appealing features for FDI. Also, government must showcase the investment potentials of the country to the world through the various technological mediums and Ghana Investment Promotion Center (GIPC) and the Free Zones Board (FZB) are laudable initiatives by government towards attracting FDI.
A Thesis Submitted to the Kwame Nkrumah University of Science and Technology in Partial Fulfillment of the Requirements for Master of Science in Economics,