The changing and multi-motives of FDI in SSA: evidence from Ghana.

This paper re-examines the main motives of foreign direct investment in Ghana. A number of studies in the literature have in the past examined the motives of FDI in Ghana and found that FDI inflow into the country was mainly for natural resource seeking purpose. But further regulatory changes coupled with increasing inflows of FDI into non-natural resource sectors of the economy necessitated the re-examination of the motives of FDI in Ghana. First the study shows that the main motive of FDI in Ghana has shifted from the traditional natural resource seeking to market seeking. Secondly, the paper finds that foreign firms now evaluate the fulfilment of multiple motives in African countries before deciding which country to invest. Thus, the availability of natural resource alone or large market size may not be enough to attract substantial amount of FDI as compared to a country that can meet a combination of foreign firms' multiple motives of market, efficiency, natural resources, and asset seeking reasons.