Foreign Direct Investment
Foreign Direct Investment
This paper will discuss a recent foreign direct investment (FDI) in Ghana, which is part of the African Union (AU), the Economic Community of West African States (ECOWAS), and the Community of Sahel-Saharan States (CEN-SAD). Ghana is a West African nation on the Gulf of Guinea with a population of over 23 million people. It is rich in natural resources which include gold, timber, cocoa, diamonds, bauxite, manganese, and oil which was recently discovered there. It has one of the highest gross domestic product (GDP) per capita in Africa and its exports are a major source of foreign exchange. It has a labor force of 10.87 million 40% of which is in industry and services, and an unemployment rate of about 20%. Ghana remains one of the more economically sound countries in all of Africa. For the purposes of this paper all denominations will be in U.S. currency ($).
The United Kingdom based mobile telecommunications corporation Vodafone Group recently made a bid to aquire a 70% stake in Ghana Telecom for $900 million while the Ghanaian government will retain a 30% stake. Ghana Telecom is the national telecommunications company of Ghana. It has over 400,000 customers for fixed and mobile telephones and internet services. Ghana Telecom has 1.4 million mobile subscriptions. It is the country’s third largest mobile operator with a 17% market share. It had revenues of around $290 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $42 million in 2007. Vodafone has made a commitment to spend $500 million on Ghana Telecom’s infrastructure, including completion of a fiber optics network.
The domestic economy of Ghana continues to revolve aro ...