President Akufo-Addo has touted Ghana’s economy as the best when compared with its West African neighbours.
Highlighting the country’s achievements in trade and investments at the 2022 Dubai Expo, the President said Ghana was the largest receiver of Foreign Direct Investment in West Africa.
Fact-Check Ghana has verified the claim and provided the verdict and explanation below.
Claim: “We are the largest recipient of Foreign Direct Investment in West Africa”
Verdict: Completely false
Explanation: Until recently, Ghana was the biggest beneficiary in the volume of Foreign Direct Investment in the West African sub-region.
The World Bank describes these investments as business decisions, or the purchase of interests in a company by investors that are outside the country–in this case, Ghana.
Ghana lost this position to Nigeria in 2020, according to the latest World Investment Report by the United Nations Conference on Trade and Development (UNCTAD). The World Investment Report is released in June every year and details the Global flows of foreign direct investments in the previous year.
The World Investment Report 2021 said Nigeria recorded a marginal increase in Foreign Direct Investment (FDI) for the year 2020, making her the largest recipient.
“In West Africa, inflows to Nigeria increased slightly, from $2.3 billion in 2019 to $2.4 billion. The average price of crude oil dropped by 33% in 2020, and lower demand along with supply-side constraints caused by the slowdown in site development restricted FDI to the country in the first half of 2020.”
The current report however noted that Ghana saw more than 50% decline in the volume of its FDI for the year 2020.
“Ghana registered a 52% decline in FDI in 2020, leaving inflows at $1.9 billion, from $3.9 billion in 2019. Stringent lockdown measures in the first half of the year contributed to the investment decline, with the country among the first in the continent to impose mobility restrictions,” the report noted.
The report further stated that “almost half of the FDI to Ghana was in manufacturing, whereas the services and mining sectors accounted for 25 and 16% of foreign investment.”
Below is a tabular representation of West Africa’s volume of FDI in nominal terms by the World Bank.
[FDI inflows, by region and economy, 2015–2020 (Millions of dollars)]
d- estimates Source: World Investment Report,2021, page 248
In Africa, the report said the five countries below are the largest recipients of FDI in 2020.
- Egypt $5.9 billion
- Republic of the Congo $4.0 billion
- South Africa $3.1 billion
- Ethiopia $2.4 billion
- Nigeria $2.4 billion
Following from the above, it is clear that President Akufo-Addo’s claim that Ghana is the largest recipient of Foreign Direct Investment is Completely false.
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