- Domestic, foreign investors needed to boost growth
David Ofosu-Dorte, founder and senior partner, AB & David Africa
Isaac AIDOO in Accra, Ghana
Ghana’s approach to foreign direct investment (FDI) needs a strategic overhaul, according to industry leaders at the 13th Ghana Economic Forum in Accra.
David Ofosu-Dorte, founder and senior partner, AB & David Africa, urged the Ghana Investment Promotion Centre (GIPC) to rethink its FDI strategy, advocating for a more balanced focus on both foreign and domestic investments to foster sustainable economic growth.
Ofosu-Dorte emphasised the critical role of domestic investment in creating an environment conducive to attracting foreign investors. He argued that while FDI is crucial, it must be complemented by robust support for local businesses to ensure long-term development.
“Every country grows with FDIs, but what Ghana has done with FDIs is different,” he observed, stressing that true development hinges on the synergy between foreign and domestic investments. He challenged the GIPC to provide data on the long-term growth and employment impact of FDIs in Ghana, noting that domestic investors are more likely to sustain their presence in the country.
Ofosu-Dorte also criticised the tendency to undermine both foreign and local investors by focusing too narrowly on macroeconomic challenges, calling for a shift in mindset. He argued that a supportive environment for local businesses would enhance the overall investment climate, making Ghana more attractive to foreign investors and contributing to a more resilient economy.
“No country grows if it ignores its domestic investors. So it is the two going together and domestic investment is a way to attract foreign investors. What we seem to do is to go around bringing foreign direct investors and kill them after they have domesticated. I have thrown a challenge,” he maintained.
Abena Amoah, managing director, Ghana Stock Exchange (GSE), reinforced the importance of capital markets in driving national development. She attributed the failure of various development plans in Ghana to the lack of emphasis on capital markets, particularly in mobilising domestic savings for investment.
According to Amoah, a strong domestic investment base is crucial for attracting foreign investors and ensuring sustainable economic growth. She advocated for an agency dedicated to facilitating the deployment of domestic savings into key sectors like infrastructure and business development, with some of these investments being channeled through stock markets.
Amoah highlighted the role of capital markets in wealth creation and economic transformation, warning that without a strategic focus on these markets, Ghana’s development efforts could falter. She noted that private sector investments — whether domestic, regional, or global — are pivotal for national progress.
Echoing these sentiments, Richard Kwame Frimpong, chairman of the Advisory Board, Financial Literacy Africa, highlighted structural challenges within Africa’s financial services sector. He pointed out that the sector’s fragmented regulatory framework hampers the effective mobilisation of domestic savings, which is essential for funding industrialisation efforts.
Frimpong called for a more integrated and coordinated approach to regulation, advocating for the establishment of a national financial services authority to oversee and synchronise the various sectors, including banking, pensions, insurance, and investments.
He stressed that such a “super structure” is necessary to ensure that domestic savings are efficiently utilised to support economic growth and development. He underscored the importance of financial literacy in empowering individuals to make informed decisions, thereby contributing to a stronger and more inclusive financial ecosystem.
As Ghana seeks to boost its economic growth and diversify its investment portfolio, the integration of domestic and foreign investment strategies, coupled with a focus on capital markets and financial literacy, is seen as vital for building a resilient and sustainable economy.
