Ghana's economy is still the toast of investors worldwide despite an unenviable macroeconomic environment which have dampened growth and pushed consumer and business sentiments to record lows.
With a stable socio-political record, the country is still attractive to investors who appear to be testing the business axiom that investments are better made when markets are turbulent.
This has reflected in the flocking of investors into the country in recent times, leading to an 18 per cent growth in foreign direct investments (FDIs) in the first nine months of the year.
Between January and September this year, FDI inflows rose to US$2.29 billion, thanks to some 120 new projects registered within the nine-month period, according to the Ghana Investment Promotion Centre (GIPC).
Although the strong growth in FDIs contradicts the economy's current grim position, Mr Emmanuel Alex Asiedu, the Managing Director of investment management and advisory firm, STANLIB Ghana Limited, said it confirmed analysts' belief that the country's challenges would ease in the medium to long term.
"We are going through a blip but the consensus among economists and people in the industry is that this blip is more of short to medium term than long term. So, if I were to invest, I would probably be looking at doing it now," he told the GRAPHIC BUSINESS on October 30.
Earlier in the first half of the year, FDI inflows into the country rose by a record 200 per cent to US$1.47 billion, relative to the amount recorded in the same period in 2014, when macroeconomic indicators were relatively stable and business confidence at appreciable levels.
In that year, FDI inflows closed at US$4 billion, then making Ghana the eighth largest recipient of inflows in Africa and the Middle East.
The economy has gone through turbulent times between 2012 and now after the commencement of oil productions pushed economic growth to 14 per cent in 2011.
Since 2012, growth has been on the decline after fiscal slippages, resulting from the cyclical election year excessive spending, rising debts and a twin fiscal and current account deficits which combined with the energy crisis to take the shine off an otherwise enviable economy. The power crisis has persisted into this year and worsened by the depreciation of the cedi.
All three top agencies – Moody's, Fitch and Standards and Poor's – lowered Ghana's ratings, with the explanation that the strong growth in debt and the accompanying debt servicing costs, the cedi depreciation and the energy crisis put the economy in a difficult position, which would take time to normalise.
While admitting that investors were not oblivious of the current state of the economy, STANLIB Ghana's MD said they were more concerned of the future than the present.
"I don't think that our macroeconomic problems are long term. In the scheme of things, they seem to be a short-term blip after what has been a relatively success story over the past years," Mr Asiedu said.
"So, yes, we've gotten into a debt position that is not most favourable, we've gotten into fiscal difficulties and we've gotten into growth declines but we find it to be difficult because we are looking at it relative to what we came from, which was far better.
"In short, the reason is that investors don't see our trouble as long term. If you read most reports and you do a lot of analyses, I think the consensus is that once we turn the 2016 corner and head to 2017, the headwinds will go down a bit and we should look at doing even better," he explained.
Mr Asiedu stressed; "I think that savvy investors should actually be looking at Ghana right now instead of running away."
The Chief Executive Officer of the GIPC, Mrs Mawuena Trebarh, however, attributed the strong growth in FDIs to the successful implementation of the new investment act, Act 865 (2013), which introduced some flexibilities needed to attract FDIs.
She said in an email response to GRAPHIC BUSINESS questions that the implementation of the new act combined perfectly with recent improvements in the efficiencies of the centre's activities and targeted investor seminars to rake in more FDIs within the period.
With fiscal discipline rebounding under the three-year extended credit facility (ECF) programme of the International Monetary Fund (IMF), the energy crisis rebating and the cedi depreciation easing, Mr Asiedu said the economy was on its way to recovery and every investment made could be guaranteed good future returns.
"The downside risks that we have is that our governments have never ever been able to beat the temptation of overspending money in election years. But even if you factored that in, 2016 looks better than 2015.
"In 2017, when you factor in the coming on stream of the Tweneboa-Nyera-Ntoumme (TEN) project, among other projects, things should be looking way better. On balance, things are not as bleak as they look," he said.