Private foreign capital inflows to Ghana in 2007 hit GH¢1.5billion in 2007

Private foreign capital inflows to Ghana in 2007 hit GH¢1.5billion in 2007
Masahudu Ankiilu Kunateh, Ghanadot

Accra, June 21, Ghanadot - A survey conducted by the Bank of Ghana (BoG), revealed that private foreign capital inflows to Ghana increased to GH¢1,519billion in 2007.

The inflows comprised direct equity investments of GH¢854million (including reinvested earnings of GH¢330million), trade credits (GH¢304million), and loans (GH¢361million).

The survey however disclosed that private foreign capital outflows were estimated at GH¢98million in 2007 raising the stock of private cross border assets to GH¢597million. Also, the net International Investment Position (IIP) of the private sector stood at GH¢3,731million at the end of 2007.

The sectors with the highest Foreign Direct Equity Investment (FDEI) inflows under the period under review were transport, storage and communications (GH¢163.4million), banking (GH¢59.9million), and mining and quarrying (GH¢48.1million), which together accounted for 82%of the total FDEI flows.

Other sectors which benefited from such flows were real estate/property services (GH¢20.8million), construction (GH¢12.4million), and manufacturing (GH¢13.8million).

The survey which was conducted between October-November 2008 with the highest response rate of 81.47% hinted that FDEI to Ghana originated mainly from Europe (60.7%) and Africa (38%).

The top ten sources of FDEI inflows in 2007 were Mauritius (27.9%), France (19.4%), British Virgin Island (18.4%), United Kingdom (16.9%), United States (5.9%), Togo (3.4%), Norway (3.3%), Israel (3.2%), Nigeria (2.1%), and Switzerland (1.9%).

The survey further disclosed that the stock of private sector debt increased to GH¢2,469.55million in 2007, most in long term maturities.

The sectors with the highest private sector debt flows were banking (GH¢366.2million), mining and quarrying (GH¢218.6million), transport, storage and communications (GH¢144.8million), and manufacturing (GH¢131million).

According to the survey, Business entities gave strong signals to expand their activities over the next three years by improving existing facilities, investing in technology and capacity building, diversifying products and services, recruitment of more local staff and construction of new buildings and structures to enhance their operations indicating strong confidence in the Ghanaian economy.

The survey of investor perceptions signaled inflation as the main economic factor which impacts negatively on business activities. Labour market rigidities such as staff turnover, wage levels, costs of skilled labour, and restrictions regarding hiring of expatriates also had negative effects on enterprises. Domestic market size, access to international, regional and domestic finance and credit, and efficiency of banking, telecommunication and internet services were viewed as positive.

The Public Relations Officer of the BoG, Ms. Esi Hammond in a release noted that the bank embarked on the survey to monitor the scale and composition of private cross border capital border capital flows and investor perceptions in Ghana.

The survey findings will help improve coverage in compiling Balance of Payments (BoP) statistics, provide estimates of Ghana’s International Investment Payments (IIP) and also provide a basic for formulating policies that would improve the investment climate in the country.

Ghanadot