The Analysis of the Contribution of China’s Foreign Direct Investment (FDI) to the Economic Development of Ghana

Over the years, China has continued to contribute to the economic development of Ghana through foreign direct investment (FDI). Hence, this study is set out to analyse the contributions of foreign direct investments (FDI) by China to the economic development of Ghana in terms of actual investment values and number of registered projects, the type of foreign direct investment (FDI) engaged by China in Ghana and the determinants for foreign direct investments (FDI) by China in Ghana. The investment reports of Ghana Investment Promotion Centre (GIPC) from 2020 to 2024 were utilized as secondary sources of data in this study. Additionally, a firm level survey was also applied to gather data. This study makes use of statistical descriptive method (SDM) and exploratory data analysis (EDA) to analyse the data. The findings revealed that China has contributed to the economic development of Ghana through foreign direct investment (FDI) by investing a total value of US$ 1,187.85 million and establishing 180 registered projects from 2020 to 2024. However, 139 registered projects representing 77.22% were established through greenfield investments and only 41 registered projects representing 22.78% were also established through joint venture in foreign direct investment (FDI). Additionally, the findings also revealed that 60 of the registered projects representing 40% were established as a result of the availability of natural resources and infrastructures whiles 30 registered projects representing 20% were also established because of the market size and trade openness in Ghana. The result further indicates that the majority of the management of the registered projects representing 75% are willing to increase their investments over the next five (5) to ten (10) years in Ghana. It is suggested that the attempts and actions of government in supporting local individuals and firms should be intensified in order to create more partnerships or entities in joint ventures with foreign companies for the creation of new separate entities and the sharing of ownerships, resources, risks and profits.