Many African countries are starting to look toward Asia to develop deeper economic relationships and tap into the region’s abundant investment resources to fund development needs, Ghanaian Finance Minister Ken Ofori-Atta said Wednesday in an interview with The Japan Times.
The finance minister, who was on a roughly one week trip to Tokyo to raise awareness about investment opportunities in Ghana, also stressed the need for African countries to diversify trade and investment relationships within Asia.
“China has had a growing influence in Africa for some time. But most African countries are beginning to see how there could be a balance in terms of their relationship with Asia,” Ofori-Atta said.
“I think Japan offers a solid alternative to a multipolar global diplomacy, and it is of interest for Africa to have diversity of options for ourselves,” he added.
Ofori-Atta was also quick to point out that geopolitical considerations were not the only factor behind his country’s decision to reach out to countries other than China for investment, as “Ghana’s development needs are huge, which leaves space for co-existence between countries investing in our country.”
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Ghana’s economy picked up steam last year, with gross domestic product growth rising from 3.7 percent in 2016 to an estimated 6.1 percent in 2017 according to a February report from the World Bank.
But prior to this recent upswing, Ghana’s central government experienced large budget deficits, leading to unsustainable levels of government debt. This eventually led Ghana to work with the International Monetary Fund on a loan program in order to meet financing needs.
The finance minister is still confident that rosier economic conditions will enable the country to finance government debt exclusively through private investment moving forward, rather than on loans from multilateral institutions such as the IMF.
“By stabilizing our macroeconomic situation, and going abroad to introduce ourselves to investors, we can find a new path outside of the IMF or other traditional institutions,” said Ofori-Atta, who in February also made stops in Singapore and Hong Kong to raise awareness about investment opportunities in Ghana’s government bonds.
Ghana, a country of 27 million people in West Africa, appears on track for high growth in 2018. According to the IMF’s latest prediction, the country’s economy is expected to grow somewhere around 8.9 percent.
“Our economy is becoming more robust and it is time to encourage Japanese FDI (foreign direct investment) and market investors, from places such as pension funds, to invest into Ghana,” the minister said.