Assessment Of Foreign Direct Investment (Fdi) and Economic Growth in Ghana

Abstract

Foreign direct investment (FDI) is an integral part of an open and effective international economic system and a major catalyst to development. Yet, the benefits of FDI do not accrue automatically and evenly across countries, sectors and local communities. This study assesses the impact of foreign direct investment on economic growth in Ghana. The study used quantitative approach. The study used secondary data from World Bank’s World Development indicators and the International Monetary Fund’s international financial statistics for a period of Thirty-Two years (1985 to 2017). The source of data was secondary data. Statistical package for Social Science (SPSS) and R-software were used in analyzing the data. The study established that, from 1988 to 2000, FDI inflow was sluggish, vacillated from 2000 to 2003 and increased sharply from 2013 to 2014. Thus, from 2014 to 2017, foreign direct investment inflows in Ghana generally follow an upward trend reflecting the decline in inflation and an upward real GDP growth trend. According to the regression model, FDI has a positive impact on the GDP growth given that the regression coefficient was positive. The The The R2 (coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53%(coefficient of determination) explained 53% variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth variation in the occurrence of GDP growth which was adequate. which was adequate. which was adequate. which was adequate. which was adequate. which was adequate. which was adequate. which was adequate. This implies that FDI was a major determinant that causes a variation in the GDP growth. The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%The model was significant at a level of 0.05%. The forecasts also show that FDI will increase continuously in the next 20 years [ all things being equal]. The study finally recommended that, improvement in the transportation system and industry, provision of sustainable energy and water, waste management, improvement in communication technology, building and rehabilitation of ports and harbor’s must be encouraged since these facilities are important in attracting foreign direct investment into Ghana.