Investment Behaviour in a Difficult Institutional Environment
After growing slowly and erratically for some decades after independence, Ghana's economy has performed much better during the past decade or so, helped by political stability and higher rates of investment. However, sustainable growth requires not only high volumes of investment, but efficient and productive investment. Accordingly, the research reported herein concerns a detailed study of investment in Ghana, focussing both on the general policy environment and also on the experience of two specific industries, namely food processing and timber products. Firms in four regions were interviewed, and significant barriers to efficient investment were identified. Formal rules and laws needed for investment were mostly in place, but their implementation needed better resourcing and firms highlighted problems of local political and kinship influences, poor infrastructure and high compliance costs as factors making investment more costly.
Keywords: Ghana, economic growth, investment, institutions, infrastructure, formal rules, political influence
IPPG Programme: Project on Investment Selection in Ghana - Final Report
Investment Behaviour in a Difficult Institutional Environment
Paul Hare and Felicia Owusu Fofie
Discussion Paper 46
June 2010
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Last modified: 09 August 2010