A new report by the Ghana Investment Promotion Centre, GIPC, analyzing the economic impact of COVID-19 on foreign investors in Ghana, has highlighted some positive measures necessary to encourage foreign direct investment in the economy.
Already, data from the centre shows that foreign businesses experienced an average revenue loss of $75,000 in the second quarter of the year due to the COVID-19 pandemic.
The GIPC in its report titled “The economic impact of COVID-19 on Foreign Investors in Ghana” points out that attempts should be made to revamp the primary and manufacturing sectors (One District One Factory), which account for a larger share of FDI, to attract more foreign investors as well as other investors such as Direct Diaspora Investment, DDI and local Direct Investments, LDI’s.
According to them, this will make the economy more diverse in terms of investments in the economy as diversification is one factor in improving resilience especially after a global crisis such as the coronavirus pandemic.
The survey also recommended that foreign direct investors, including small and medium enterprises, can improve their resilience during this crisis by taking advantage of linkages with parent companies and home countries as well as the support of the host Ghanaian government.
The survey indicated that on average, most foreign investors were strongly impacted by the pandemic with most companies experiencing payment and repayment delays, financial constraints and a reduction in demand for products and services.
Although the majority of the foreign investors do not anticipate a permanent reduction in their workforce within the next 6 months, a majority of employees were made to temporarily stay and work from home.
Also, though most foreign investors opined that on an average, the forms of assistance offered by the Government of Ghana to mitigate the impact of the coronavirus on businesses was applaudable, however, access to information regarding the benefits of the Business Support Scheme was not easy.
The report also revealed that most foreign investors welcomed the new business opportunities, especially in the manufacturing, agriculture, and e-commerce sectors among others, which the pandemic has presented.
Among other things, it showed that FDI inflows reflected in the new registration of foreign companies recorded by the Centre indicate a significant decline in registration of new investors in the period of 1st April- 12th June 2020 as compared to the same period in 2019.
In a similar period of 2019 (1st April- 12th June 2019), the Centre recorded thirty-four (34) projects with a total FDI value of US$ 40.11million.