Data from the Ghana Investment Promotion Center (GIPC) shows that the country recorded one of its lowest foreign direct investment (FDI) of US$649.58 million in 2023. This is about 55 percent drop from the previous year which was at US$1.47 billion. For a West African country with all the pegs that make Ghana an attractive destination for FDI, it is a concern that that country is unable to attract investment, particularly into areas of agribusiness and the industry sector.

For a country to be positioned for FDI, some basic requirements must be met. These include, political stability, economic stability, available infrastructural development, skilled labour and a fair judicial and legislative system as key requirements among others. It is important to state that Ghana has almost all the requirements to attract FDI into the country. What however is the challenge is the country’s inability to attract the needed FDIs.

Even though Ghana can be a perfect destination for investment, many have pointed out some lingering challenges that must be addressed to make the country a first choice destination for investors. Some of the challenges that require an immediate reform of the country’s policies include, high taxes and levies, exchange rate depreciation, delayed payments, weak economic fundamentals, high cost of electricity, access to credit, erratic power supply, and an administration that does not play multiple roles at the same time, such as that of executive power combined with that of shareholder of a semi-public company in conflict with a private one, among others.

It is therefore not surprising that many global companies have in recent times relocated to neighboring countries to produce their goods. We can´t allow this to happen.

For a country, strategically located in the West African region, it is expected that that Ghana could be able to attract all the needed investments to make the country a hub and a center for distribution. For instance, Ghana could be an aviation hub. The country could serve as a major transit point to connect to other West African countries. In addition, Ghana’s Tema Port a strategic asset that could help in the import and export of goods. Ghana should have, for this and for everything, the best connectivity possible and that can only happen if we carefully and justly manage conflicts between companies, such as the still pending one between a private infrastructure telecommunications company and a semi-public carrier one.

It is important to point out that Ghana’s economic conditions, necessitating the country to seek an International Monetary Fund (IMF) programme bailout is a major factor that has affected the country’s ratings at the capital market.

The impact of the IMF’s approval of Ghana’s Extended Credit Facility in May 2023, supporting the implementation, was crucial for economic resilience. Looking back at the gains, the programme has been able to lead to positive outcomes, including a relatively stable currency, a significant drop in inflation from 53.6percent in January 2023 to 26.4percent by November 2023 and currently at 20percent and a revitalized Ghana Stock Exchange.

All these highlight the tangible impacts of the IMF deal on Ghana's economic stability and financial markets. It is expected that the improving trends will be translated into increased confidence, particularly in the realm of investments.

According to the GIPC, a significant increase in average monthly FDI was recorded from US$44.79 million in the first half of 2023 to US$63.47 million in the second half, post the IMF deal announcement. For many analysts, this reflects growing faith in Ghana's economic recovery and attractiveness for investors.

To attract more FDIs, it is very important to point out that the exchange rate regime is major determinant. For investors to bring their monies into a country, they must be certain that after making profit their monies will not devalue when leaving the country.

Even though Ghana has done well in maintaining political stability, it is imperative to mention that political stability alone without a reliable electricity supply an infrastructure will not deliver the FDI needed. Not only do businesses need constant electricity supply, it must also be affordable. In fact to have a good industry sector, electricity must be affordable and reliable. Over the past six years, government has tried to improve ICT and technology to reduce cost, corruption and improve the ease of doing business.

In Ghana, for example, strides have been made to improve the ease of doing business through the digitization of government processes, improvements in business registration processes, and enforcement of policies that create a level playing field for businesses. All of this has contributed to creating an enabling business environment.

However, Ghana still faces challenges with hyperinflation, currency devaluation, limited infrastructure, and policy enforcement that continues to pose a challenge for the development of industries. These challenges are not unique to just one industry but cut across the telecommunications, oil, energy, manufacturing, and other industries and have resulted in waning foreign investments and could deter future potential investors from considering the country.

Despite the challenges, policy reforms and enforcements serve as a beacon of hope for driving an enabling business environment. When the government develops, refines, and enforces policies across industries that create balanced and fair resolutions to disputes, tax incentives, and favorable monetary and fiscal policies, this will position Ghana and other Africa countries as investment hubs that can generate significant returns and advance industries to global standards.

With the support of the government through the enforcement of policies, investors will be more inclined to invest knowing that the business environment is supportive and fair. However, when cases of unresolved or poorly handled disputes make the news, it sends shock waves across the impacted industry, creating investor panic and withdrawal, which could be detrimental to the economy.

Industry regulators in Ghana are making improvements to better position and align their sectors with global best practices to improve the ease of doing business and further attract foreign investments. But there is still work to be done.

Public-private partnerships and dialogue needs to be fostered and continue to strengthen the investor environment as deliberations on required improvements are discussed and mutually beneficial conclusions are made to foster ease of doing business that will benefit industries, business owners, and foreign investors thereby accelerating economic development following global best practices.

Africa is on the right trajectory for tremendous advancement and countries like Ghana with one of Africa’s highest Ease of Doing Business indices, remains an attractive investment destination. To keep the momentum and possibly strengthen investors’ perception of the business landscape, the onus is on the public and private sectors to continue to dialogue on how to adopt best practices that will keep the country attractive to investors.