FDI In Ghana Telecommunication Sector:the Role Of Law And Regulation

In this current world of liberalization, privatization and globalization attracting FDI is necessary and desirable to the extent that inflow and outflow of FDI has now become a norm in all countries around the globe in both developing and developed countries. Ghana is no exception; it has also made a number of reforms to attract FDI which among others include liberalization and deregulation of the sectors of Ghana’s economy. Governments passing of new laws to encourage foreign investment and replacing old laws and regulations perceived as unfriendly to investors encourage FDI. It is presumed that this could boost investor confidence and attract more FDI into various sectors of the economy including the telecommunications sector.However, it is argued that although laws and regulations have boosted foreign investments in telecommunication sector, these laws and regulations tends to be ineffective over time due to the changing nature of risks in the sector. In particular a number of questions remain unanswered regarding the effectiveness of existing laws and regulations in securing the right kind and volumes of FDI. A study that will assess the overall legal and regulatory environment and evaluate the effectiveness of laws and regulations on FDI in the telecommunication sector to know how they succeed in attracting FDI to the sector is highly required due to the fact that the legal environment in an economy affects positively or negatively the FDI activities and invariably the GDP growth of that economy.To this end the study is intended to assess the overall legal and regulatory environment of Ghana’s telecommunication sector and evaluate the effectiveness of the laws and regulations aimed at attracting FDI in Ghana. In order to achieve this aim, the study sought to:assess the overall legal and regulatory framework of the telecommunication sector; outline laws and regulations on FDI in the telecommunications sector of Ghana; evaluate the effectiveness of specific laws and regulations aimed at attracting FDI into the telecommunications sector; Examine the challenges of current laws and regulations on FDI in the telecommunications in attracting FDI to the sector and based on this study, give recommendations for improving the effectiveness of laws and regulations in the telecommunication sector to attract FDI to the sector and the economyThe methodological approaches used in this research were quantitative and qualitative methods. The qualitative approach was based on information gathered through the use of questionnaires, surveys, personality test etc. The quantitative approach was based on secondary data, reports and detailed views of informants, case studies, interview guides.A total of50questionnaire interviews were conducted. The researcher ensured the data collection methods gave a correct representation of the population; there was a fair representation of gender, political party; regional and religious groupings reflecting the broader spectrum of the population to ensure responses did not reflect the perspectives of one grouping. The sample was chosen using a purposive sampling method. This being a qualitative study, the data analyzed and displayed through tables, graphs, histograms and the issue of validity, reliability and ethical was taken into consideration throughout the research.The study revealed that laws and regulations in the telecommunication sector are on a whole effective although measured from individual sectors perspective, there is a sign of being ineffective in attracting FDI into some sectors of the economy including telecommunication sector. It found that the current legal and regulatory framework therefore needs improvement. The overall legal and regulatory framework will fail to attract FDI into the sector if action is not taken to address the perceived ineffectiveness of some of the laws on FDI in the telecom sector. Red tape and poor implementation of laws create barriers to FDI in the telecom sector. Strong laws and regulations matter for protecting investor interests and attracting FDI into the telecom sector.The conclusions from the findings emerging from the study is that though laws and regulations and the overall legal and regulatory framework of Ghana may not be the main drivers of foreign investment decisions into Ghana’s telecommunications sector, they can tip the balance in favour of Ghana over another if all other factors are equal in today’s increasingly competitive global business environment.From the conclusion it is recommended that strong laws and regulations matter for protecting investor interests and attracting FDI into the telecom sector needs improvement so as to be able to attract right kind and volumes of FDI...