Citation :

Emmanuel Atobrah, 2025. "A Comparative Assessment Of The Contribution Of Foreign Direct Investments And Domestic Investments To The Economic Development Of Ghana." ESP International Journal of Science, Humanities & Management Studies(ESP-IJSHMS)  Volume 3, Issue 2: 63-70.

Abstract :

Generally, countries in West African countries including Ghana have suffered unfortunate developments with reference to the stockpiling of funds necessary to finance investment appetite in order to promote economic development. Due to this, Ghana keeps seeking for sources of investment which includes foreign direct and domestic investments to enlarge the savings-investment gap. Lately, there has been an extreme variation in the degree of both foreign direct and domestic investments especially due to uncertainty and international transformation. This enticed the focus of this study. Hence, this study work comparatively assessed the contributions of both foreign direct and domestic investments to Ghana’s economic development from 2020 to 2023. The findings revealed that both foreign direct and domestic investments have a profound effect on the economic development of Ghana. However, the foreign direct investment inflows demonstrated a strong impact in terms of monetary value with the minimal influence of investments made by Ghanaian investors in completely foreign owned projects. The outcome also revealed that domestic investments have a significant impact, in terms of monetary value, on Ghana’s economic development with the influence of a component of investments made by foreign investors in entirely Ghanaian owned projects. A recommendation is made for the Government of Ghana to prioritize diversifying the economy and encouraging more foreign and domestic investments in the various sectors to create more financial stability. Consistency and transparency in investment-related policies should be implemented to foster a more favourable investment climate to both foreign and local investors. Public-Private Partnerships should actively be promoted to help in sharing risks and benefits, thereby attracting more foreign and local investors willing to invest in large-scale projects.

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Keywords :

Foreign Direct Investment (or Direct Foreign Investment), Domestic Investment, Economic Development, Foreign Investment module, Local Currency Module.