China's Outward Foreign Direct Investment in Africa: How are Ghana Benefiting and its Issues on the Economy?

Abstract

As more nations continue to embrace foreign direct investment (FDI) inflow to enhance economic development, China has increased its outward foreign direct investment on the African continent of which most countries have benefited from it with Ghana not an exemption. To investigate whether China is contributing significantly to the number of projects by foreign investors over the years, the total number of FDI registered projects by the top investing countries within the Ghanaian economy were considered. This paper makes use of quantitative analysis through a descriptive statistical approach based on the data generated from the Ghana Investment Promotion Centre (GIPC) between 2013 and 2018. It was revealed that, China's contribution to the total number of FDI registered projects is very significant, but the estimated cost of these Chinese projects is lower. However, Chinese investment is mostly found in the manufacturing sector of the Ghana's economy. It is suggested that, as the government prepares to roll out on the one-direct-one factory initiative, sound investment policies should be established to protect these infant industries and promote outward FDI.