Ghana poised to be priority destination for Chinese investment: trade analyst

Ghana is poised to become a priority destination for Chinese foreign direct investment (FDI) in the immediate term, a Ghanaian trade analyst told Xinhua in an interview.

Francis Korankye-Sakyi, an international investment analyst with the Centre for African Trade and Investment Policies, said Ghana's growing relevance in Africa and China's international trade policy would lead to more Chinese FDI to the West African country.

Ghana is going to be a priority country to benefit from Chinese FDI due to China's South-South cooperation activities, Ghana's leadership role in the African Continental Free Trade Area (AfCFTA), and China's flexible terms of investment abroad, the analyst told Xinhua.

"Because China is already in the country and recognizes these needs, and opportunities, it will be easy for them to tailor FDI into the specific sectors to provide these needs arising out of the latest developments that put Ghana at the forefront of Africa's quest to boost intra-regional trade," he said.

Meanwhile, he stressed the need for Ghana to develop the country's financial sector and infrastructure to create an enabling environment for international trade facilitation.

He described China's trade policy as robust, saying that because of the COVID-19 pandemic in 2020, some developed countries put an embargo on investing in certain sectors of the Ghanaian economy, "but China took advantage of some of those sectors to invest so it is no wonder their FDI inflow to Ghana is increasing."

"For instance, in the pharmaceutical sector, China has taken advantage of the relaxed attitude of the other economic blocs in Ghana and is making serious inroads through their open policy," he added.

Coupled with its favorable international trade and investment policy is China's commitment to the South-South Cooperation, through which it has been supporting many developing countries with trade-related assistance in railways, bridges, ports, and roads, he said.

"As China prioritizes its role in promoting South-South Cooperation, the need for infrastructure development to boost Ghana's international trade as a model for AfCFTA is something China seems willing to invest in for mutual benefit," he said.

He added that since China is already heavily present in Ghana, it knows where the gaps exist in the country's trade-related infrastructure, and "is well-positioned with the right strategies to take advantage of investment opportunities in this area as well."

He lauded the Ghanaian government for its handling of the COVID-19 outbreak, which had won accolades globally, and endearing the West African country to many global economic powerhouses including China, as a safe investment destination on the continent.

"This is one of the reasons you saw a sharp increase in Ghana's FDI numbers in 2020, with Chinese FDI into Ghana also increasing sharply, despite the pandemic," said the analyst, who is also a law lecturer at the University of Cape Coast.

He said the West African country's gold, cocoa and crude oil exporting was catching up with the top beneficiary countries on the continent due to China's interest in Ghana's transportation, communication, construction, and manufacturing sectors.

"I am optimistic that this increase in Chinese FDI inflow to Ghana and Africa we see now would remain so for a long time to come, because, unlike the restrictive approach adopted by developed countries, China has flexible investment terms for developing countries, and is also open to regional and international trade agreements," he added.