This study assesses the determinants of foreign direct investment (FDI) at sector level in
Ghana taking into consideration the agriculture sector, services sector, and manufacturing
sector. Using sector level data spanning 2000-2014, findings from the Ordinary Least
Squares (OLS) regression analysis show that market size (measured by GDP) and labour
cost have a significant impact on the inflows of agriculture sector FDI. The results also
confirm trade openness and exchange rate to significantly influence services sector FDI.
Unexpectedly, none of the variables are found to have significant effect on manufacturing
sector FDI. The study recommends that the government should implement strategies that
will enhance the growth of Ghana’s GDP, and deregulate the economy to allow more
foreign investors into the country.
