Characteristics of Foreign Direct Investment into Agriculture in Ghana

Abstract

The paper investigated the characteristics of foreign direct investment( FDI) to Ghana's agriculture by  examining the flow of funds, projects, employment and possible pre-independence legacies in FDI inflows from Ghana's former partners in colonial relationships and the slave trade. Using moving averages, percentages, cross tabulations and chi-squares tests, to data from 1994-2010, the following conclusions were drawn; a) FDI flows, measured by estimated cost of projects remained stable and low for most part of 1994-2010. However, huge jumps were witnessed after 2008, coinciding with Ghana's second time of successful and peaceful transfer of political power to another government; b) Clustering of agricultural projects in Greater Accra Region, c) a strong attraction of large FDI firms for the crops subsector; d) 75% of the FDI projects are SMEs; e) Among European countries, Ghana's former slave and colonial masters, Britain, Netherlands and Denmark contribute most FDI projects to Ghana's agriculture. Volta Region has strong attraction for projects from Germany. Strategies need to be designed to attract projects beyond Greater Accra, where poverty reduction may be better felt.

Keywords: FDI;Agriculture;Employment;Distribution;Projects.