THE IMPACT OF FOREIGN DIRECT INVESTMENT ON THE EONOMIC GROWTH OF GHANA FROM 1997 TO 2017

Abstract

The main objective of this study is to assess the impact of Foreign Direct Investment (FDI) on the economic growth of Ghana. To achieve the objective, this paper has carried out statistical analyses of the relationship between FDI and its impact on selected macroeconomic indicators such as Gross Domestic Product (GDP), Gross Domestic Product growth rate (GDPg), Gross National Income (GNI), Inflation rate, Balance of Trade (BOT), and Balance of Payment (BOP). The study has analyzed time series data over a period of Twenty – one years, from 1997 to 2017. Multiple Regression Analyses were used to evaluate the relationship between independent variable (FDI) and the dependent variables (macroeconomic indicators). It was discovered that there is a positive correlation between FDI and economic growth and may be a concern for the government of Ghana. The government might focus on needed reforms and policy implications to make foreign investment more useful and advantageous.