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Chinese investment in Ghana’s manufacturing sector

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  • Tang, Xiaoyang

Abstract

This paper uses Ghana as a case study to illustrate the extent to which Chinese manufacturing firms are driving manufacturing in an African country. Through a combination of desktop and field research, the author finds that the total number of Chinese manufacturing investments in Ghana indeed increased during past decade, but quite a few projects have been abandoned or not implemented because of the unfavorable investment environment. Small and large manufacturing projects can be found in different sectors, such as plastics, steel, pharmaceuticals, and others. All of the manufacturing investments target local or regional markets, either taking advantage of local raw materials or seeing opportunities in a market with little competition. Transitioning from trading to manufacturing investment and clustering are identified as the main patterns by which Chinese investors establish themselves in Ghana. Chinese firms source simple raw materials from local suppliers but import industrial supplies from abroad. Learning from Chinese business models, a few local businessmen have started their own manufacturing projects, mostly in the plastics recycling sector, but a lack of capital appears to keep some local players from moving up the value chain. Ghana’s weak economy itself is limiting technology transfer and local linkages between Chinese firms and Ghanaians.

Suggested Citation

  • Tang, Xiaoyang, 2017. "Chinese investment in Ghana’s manufacturing sector," IFPRI discussion papers 1628, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1628
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    References listed on IDEAS

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    3. Justin Yifu Lin, 2013. "From Flying Geese to Leading Dragons: New Opportunities and Strategies for Structural Transformation in Developing Countries," International Economic Association Series, in: Joseph E. Stiglitz & Justin Lin Yifu & Ebrahim Patel (ed.), The Industrial Policy Revolution II, chapter 1, pages 50-70, Palgrave Macmillan.
    4. Hong Song, 2011. "Chinese Private Direct Investment and Overseas Chinese Network in Africa," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 19(4), pages 109-126, July.
    5. Jing Gu, 2009. "China's Private Enterprises in Africa and the Implications for African Development," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(4), pages 570-587, September.
    6. Shen, Xiaofang, 2013. "Private Chinese investment in Africa : myths and realities," Policy Research Working Paper Series 6311, The World Bank.
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