Catalysts and Barriers to Foreign Direct Investment in Ghana

Abstract

Foreign direct investment (FDI) is regarded as the catalyst for the growth of developing economies in recent times.  This study investigates the factors influencing the FDI in Ghanaian economy. The study administered questionnaire to twenty two (22) Chief Executive officers of Multinational Companies operating in banking, telecommunication, mining, oil and gas sectors of the Ghanaian economy. The result indicates that several factors influence or inhibit FDI in the economy. Factors that encourage FDI in Ghana include the abundance of natural resources, political stability, availability of cheap labour force, and growing markets. Several barriers were found present and these include, among others, poor ICT infrastructure, volatile exchange rates, lack of reliable supply of water and energy, and poor road network as the very important factors that inhibit inflows of FDI into Ghana.