It is a known fact that foreign investment is a key contributor to development. Every country that aims to evolve rapidly and evolve into a powerhouse should be willing to exploit this avenue. In 2020 alone, foreign direct investments in Ghana amounted to 1.88 billion US Dollars. Which represented roughly 2.7 percent of the country's GDP, showing the impact that foreign investments can have on any economy.
Ghana has been highlighted to have a strong knack for attracting foreign investors from all over the world. In today's article, I’m going to tell you some of the reasons why Ghana is such an attractive sport for foreign investment.
The first major contributor that needs to be bet on in order for an investor to even contemplate investing in an asset, is how safe the asset is. Hence for a country to receive foreign investments, peace is paramount. Thankfully, Ghana the Shining Star of Africa can boost having peace in abundance. Ghana is ranked as the second most peaceful country in Africa and 40th globally in the 2022 GPI report. Ghana's high attitude toward democracy and freedom of speech, accompanied by the unbelievable hospitality and camaraderie amongst the citizens has made the country a hub for peace and a safe bet for Global Investors.
Countries with occasional spirits of Civil War and conflict are major red flags to foreign investors. This is due to the fact that assets being invested in can easily be lost in times of turmoil as collateral damage. But with a country such as Ghana, investors wouldn't have to worry about the safety and security of their assets. Hence making it easier for them to go about their business smoothly.
Another very key contributor to why Ghana is able to attract loads of foreign investors is political stability. This goes hand in hand with the fact that we have a very peaceful country. A steady and stable political system means there's steady growth in the country's development which is music to the ears of any interested investor. Ghana's stable political system ensures that the next government in power does not just throw away the initiatives and projects of the previous ones.
Hence investment made at any point in time will stand for a long period of time. Ghana can boast of having one of the most stable political systems on the African continent backed by democracy. All roles of all sectors of government are strictly defined in the nation's Constitution and followed religiously. There is always a smooth transition of power from one government to the next with a sense of fairness. Foreign investors thereby always remain confident in the country's political system.
Yet another major reason Ghana is so appealing to foreign investors on the world stage is the low cost of production within the country. The cost of goods and services especially the labor force here in Ghana is relatively low compared to other nations. With the minimum wage being as low as 14.88 Ghana cedis.
Also the currency of most of these foreign investors usually the dollar, pound, and euro are by far superior to our Ghana cedis. Hence these investors are able to maneuver freely without being hit by financial constraints. They are able to carry out their planned investments to the fullest without burning out their cafes. This particular attribute has led to foreign investors investing heavily in production companies all over the country.
This sometimes happens to be a demerit to the citizens of the country as they are usually exploited heavily by foreign CEOs. Due to the fact that there's an abundance of a very cheap labor force. In certain countries especially on the African continent, foreign investors are largely found. Ghana's policy on foreign investments is very welcoming and provides investors with all the freedom they need to grow their investments. There is no restriction of access or freezing of assets. Ghana's openness and willingness to accept foreign investors are one of the main reasons the country has become extremely popular.
Last but not the reason why Ghana has become so attractive to foreign investors is the country's constant rapid developing nature. Ghana is one of the fastest developing countries both on the African continent and globally. In all aspects of the country's economy, infrastructure, social welfare, and others. Ghana has continuously risen in the level of development at a very steady pace.
This serves as a perfect indicator for Global Investors that the country is headed in the right direction. Hence their investments just like the country itself will continue to develop and grow. Ghana has one of the fastest-growing economies with an outstanding rate before the covid-19 pandemic hits significantly slow that down. It still seems even after the sudden decline, Ghana still remains the investment gateway of West Africa.
Major companies such as Toyota opened a Vehicle Assembly Plant in Tema in June of 2021 and South Korean car makers such as Hyundai and Kia. Also establishing plans to open Vehicle Assembly plants in 2022 in Ghana will remain the hotspot for foreign investments. The country will definitely do well to hold its high standards and keep its gleaming reputation in order to keep attracting these investors. Because of how important these investors are to the country's growing economy.
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