Effects of Foreign Direct Investment Inflows into Agriculture on Food Security in Ghana

Abstract

This study investigated the effects of FDI on food security in a developing country, Ghana. A double logarithm functional form was employed. Daily energy consumption (hunger) was negatively related to agricultural FDI and significant in both the short run and long run. Likewise, daily protein consumption (nutrition) was negatively related to agricultural FDI and statistically significant in the short run and long run. This outcome established a detrimental effect of agricultural FDI inflow on food security in Ghana. Efforts at growing Ghana's economy and increased national income relative to population growth may not promote food security unless government directs final expenditure towards food security programmes specifically. Though further improvement in FDI inflow to agriculture should not be ignored for the sake of its positive benefits, specific interventions are required to ensure that smallholders are not side-lined in production. Government must support appropriate lower priced technologies that smallholders can adopt.

Keywords: Food security, Daily energy consumption, Daily protein consumption, Agricultural FDI, agricultural economic growth, government final expenditure, democracy, Ghana.