Ghana has long positioned itself as one of West Africa’s most attractive destinations for foreign direct investment, buoyed by political stability, market access under the African Continental Free Trade Area (AfCFTA) and a reputation as a regional trade hub, yet large scale manufacturing investments remain limited despite the country’s advantages.
In an interview, Dr. Andrews Ayiku, Senior Lecturer and SME (Small and Medium Enterprise) Industry Coach at the University of Professional Studies, Accra (UPSA), stated that the hesitation by foreign investors to establish factories in Ghana is rooted less in interest and more in unresolved structural constraints that make manufacturing operations uncertain and costly.
According to Dr. Ayiku, who coordinates the MBA Impact Entrepreneurship and Innovation Programme at UPSA, many foreign investors are not opposed to manufacturing in Ghana. He explained that what they struggle with is the gap between policy intent and operational reality, noting that trading is flexible and reversible while manufacturing is capital intensive and long term, making investors far more cautious about committing resources.
Regulatory complexity emerged as the first significant barrier identified by the UPSA lecturer. While Ghana has improved its business registration processes over the years, manufacturing firms still face multiple layers of approvals once they move beyond incorporation. Environmental permits, sector specific licenses and local authority clearances are often handled by different agencies with limited coordination.
Dr. Ayiku stated that an investor may receive approval from one institution only to be delayed by another with overlapping authority. When timelines are unclear and processes are unpredictable, investors factor in delays and rising costs, which weakens Ghana’s competitiveness against other manufacturing destinations in the region and globally.
Land access poses another significant challenge for potential manufacturing investors. Dr. Ayiku noted that manufacturing requires secure, large scale land holdings with long term certainty, something Ghana’s land tenure system struggles to guarantee. Fragmented ownership, disputes and delays in title registration frequently disrupt project timelines and add uncertainty to investment decisions.
According to the UPSA academic, foreign manufacturers want to know that once they acquire land, they can build, expand and operate without future disputes. When land security is uncertain, investors either scale down their plans or relocate to jurisdictions with clearer land administration systems. Although industrial parks and special economic zones were designed to address this challenge, Dr. Ayiku observed that limited availability of fully serviced land and high costs have reduced their impact.
He added that inconsistent access to utilities such as power and water further compounds the problem for energy dependent industries. Manufacturing operations require reliable electricity and water supply to maintain production schedules and meet quality standards. When these utilities are unreliable, production costs increase and competitiveness declines.
Skills availability represents another area where Ghana faces a credibility gap with potential manufacturing investors. While the country produces a large number of graduates annually, Dr. Ayiku argued that many lack the practical competencies required in modern manufacturing environments. He stated that manufacturing today is technology driven and investors want technicians who can operate machinery, maintain systems and meet international quality standards.
When firms must spend heavily on basic training, it raises production costs and discourages factory establishment, according to Dr. Ayiku. He stressed that the issue is not a lack of talent but a mismatch between training and industry needs, calling for deeper collaboration between manufacturers, technical institutions and universities to align curricula with practical manufacturing requirements.
Beyond infrastructure and skills, Dr. Ayiku identified policy uncertainty as a critical deterrent to manufacturing investment. Manufacturing investments, he explained, depend on stable trade, tax and industrial policies that allow investors to plan over long horizons stretching a decade or more. Frequent changes in tariffs, import restrictions or local content rules, sometimes without adequate transition periods, introduce risk that undermines investor confidence.
Dr. Ayiku stated that investors are willing to comply with tough rules, but they need consistency and clarity. He believes Ghana’s strong appeal as a trading hub ironically works against its industrial ambitions, noting that importing and distributing goods is faster and less risky. Until manufacturing offers comparable predictability, investors will continue to prioritize trade over factories.
Despite these challenges, the UPSA lecturer remains cautiously optimistic about Ghana’s manufacturing potential. With targeted regulatory reforms, expanded industrial land development, stronger skills alignment and stable policy signals, Ghana could reposition itself as a manufacturing destination rather than merely a trading gateway.
Dr. Ayiku concluded that manufacturing is not attracted by incentives alone but thrives where systems work, costs are predictable and long term commitments are respected. If Ghana gets these fundamentals right, foreign investors will not just trade here but will build factories and create manufacturing jobs for Ghanaians.
Dr. Ayiku brings over 18 years of expertise in business model design, strategy and innovation. He holds a PhD in Business, a Doctor of Business Administration in Marketing, an MBA in Marketing, and qualifications from the Chartered Institute of Marketing in the United Kingdom. He serves as West Africa Manager for the E4Impact Foundation and is part of the research team at Altis Graduate School, Università Cattolica del Sacro Cuore in Italy.
His analysis comes as Ghana seeks to leverage AfCFTA to attract manufacturing investment and move beyond its traditional role as an import and distribution hub. The government has emphasized industrialization and value addition as priorities in its economic transformation agenda, but translating policy objectives into operational reality requires addressing the structural constraints Dr. Ayiku identified.
While foreign capital continues to flow into trading, distribution and services sectors, the persistence of regulatory complexity, land tenure challenges, skills mismatches, infrastructure gaps and policy uncertainty continues to limit Ghana’s ability to attract the large scale manufacturing investments needed to drive industrial transformation and create quality employment opportunities.
