Blog Category: International Expansion

Between January and August 2023, six countries have set new records for foreign direct investment (FDI). These countries are: Morocco, Malaysia, Iraq, Democratic Republic of Congo and Finland. In addition to these six countries, another five countries – Saudi Arabia, Chile, Ukraine, Botswana and Slovenia – have recorded their largest announced FDI since before the global financial crisis ended in 2009.

Inbound FDI into Ghana reached $1.5 bn in 2022, and increase of 25% on in 2021 at $1.2 bn. China was the largest source of inbound FDI and most investment was in the manufacturing & services sectors. 6,247 jobs created. Total in Africa was Egypt first in 2022 then South Africa and Ethiopia in terms of inbound investment value. In the same timeframe global FDI decreased by a third. A new Government initiative the Automotive Development Policy includes a component manufacturing policy to drive local content development of parts & accessories for maintenance and repair but also assembly, to drive the local automotive sector. A new training centre at the University of Ghana ‘Engineering Sciences Training Centre’ in the Engineering school has also been announced. Toyota Ghana has also announced a second facility including a new body & paint workshop, a service workshop, spare part sales & a vehicle delivery centre. A recent trade mission from Sweden and Denmark hosted in Accra to establish local partnerships and engage with relevant government agencies and local businesses in Ghana took part in lectures and B2B meetings.

£50 million in funding is available for innovation in four key areas of manufacturing. The Government is funding £11 million through the Advanced Propulsion Centre in the Advanced Route to Market Demonstrator competition (ARMD2) for innovative ideas in electric motorcycle and emergency vehicles with £22.7 industry matched funding. The Centre for Connected and Autonomous Vehicles (CCAV) is funding 43 companies £18.5 million including those which innovate in self-driving vehicles and sensors. The Faraday Institution through Innovate UK is funding £19 million of ideas in four battery research and innovation projects.

Vietnam’s Prime Minister visited the US last week with a view to attracting FDI into Vietnam in the technology and innovation sectors. Various Vietnamese Government sub-departments have signed MoUs with US organisations such as Synopsys and Cadence Design Systems which are both semiconductor chip design companies. In addition, an MoU was signed with Arizona State University which focuses on ‘information sharing’ and educational programs in the semiconductor and related fields. The US is Vietnam’s largest foreign investor with a total of 17% share. A new research 5-hectare centre is being built in the Hanoi region. Recently the US and Vietnam have upgraded trade relations to ‘Comprehensive Strategic Partnership.’ In 2022 China was Vietnam’s top trading partner with bilateral trade at USD$176 billion followed by the US with $124 billion, South Korea with $86 billion and Japan at $48 billion.

Vietnam’s Prime Minister visited the US last week with a view to attracting FDI into Vietnam in the technology and innovation sectors. Various Vietnamese Government sub-departments have signed MoUs with US organisations such as Synopsys and Cadence Design Systems which are both semiconductor chip design companies. In addition, an MoU was signed with Arizona State University which focuses on ‘information sharing’ and educational programs in the semiconductor and related fields. The US is Vietnam’s largest foreign investor with a total of 17% share. A new research 5-hectare centre is being built in the Hanoi region. Recently the US and Vietnam have upgraded trade relations to ‘Comprehensive Strategic Partnership.’ In 2022 China was Vietnam’s top trading partner with bilateral trade at USD$176 billion followed by the US with $124 billion, South Korea with $86 billion and Japan at $48 billion.

Vietnam’s Prime Minister visited the US last week with a view to attracting FDI into Vietnam in the technology and innovation sectors. Various Vietnamese Government sub-departments have signed MoUs with US organisations such as Synopsys and Cadence Design Systems which are both semiconductor chip design companies. In addition, an MoU was signed with Arizona State University which focuses on ‘information sharing’ and educational programs in the semiconductor and related fields. The US is Vietnam’s largest foreign investor with a total of 17% share. A new research 5-hectare centre is being built in the Hanoi region. Recently the US and Vietnam have upgraded trade relations to ‘Comprehensive Strategic Partnership.’ In 2022 China was Vietnam’s top trading partner with bilateral trade at USD$176 billion followed by the US with $124 billion, South Korea with $86 billion and Japan at $48 billion.

Interest rates impact FDI because high interest rates mean debt becomes more expensive. Expensive borrowed capital may lead to borrowers being discouraged due to higher costs. As the cost of greenfield projects increase, less foreign investors may pursue an interest or wait until the cost of debt decreases, when the project may become more affordable to complete, and yield a higher return of investment. Currently, interest rates are at record highs globally to stem inflation which is also at record breaking levels. One major source of FDI is expansion of existing projects. With higher interest rates and higher financing costs, extension or increased investment may not be viable or paused until the cost of debt decreases. Interest rates are expected to decrease in 2024.

The UK Foreign Secretary James Cleverly recently travelled to Ankara Turkey to discuss a refresh of the UK Turkey free trade agreement signed in 2020 which currently only covers goods. UK Turkey bilateral trade in 2022 was worth almost £24 billion in the four quarters to 1Q23. and is up around 20% year over year. UK exports to Turkey are around £9 billion whilst UK imports from Turkey are around £15 billion. Turkey’s top export good to the UK is vehicles, machinery and textiles. UK’s top exports to Turkey are gold, combustion engines and metal. The Turkish press release mentioned the new agreement would be focused on digital trade and services. Turkey is the UK’s 18th largest trading partner.

The UK Government has purchased a pavilion at 2023 SEMICON event in Taiwan and sponsored a delegation of 19 businesses to showcase the UK’s semiconductor capacity at the event. The businesses will showcase design, software and methods at SEMICON. The UK published its semiconductor strategy in May which committed £1 billion investment over the next decade in R&D, IP and chip design. Taiwan is the world’s top semiconductor manufacturing country. Taiwan Semiconductor Manufacturing Company makes microchips for Intel, Apple, AMD, Nvidia, and Qualcomm. South Korea is the second largest producing nation as it makes chips for Samsung. Taiwan is seeking a trade deal with Europe and Europe finds Taiwan useful as a partner to work with under the European Chips Act, however Taiwan is looking for a bilateral investment agreement which is not forthcoming.

India is chairing the G20 this year under the theme ‘One Earth, One Family, One Future.’ Trade and investment ministers met in Jaipur this week to discuss digitising trade, SME inclusion in international trade, and the reform of the World Trade Organization. Business and Trade Secretary Kemi Badenoch attended and launched ‘Alive with Opportunity,’ a £1.5 million marketing campaign designed to build on the UK and India’s relationship and as part of the goal to bilateral double trade with India by 2030. India has grown to the world’s fifth largest economy, from below tenth place a decade ago. The meeting was attended by 300 ministers and delegation representatives. Indian Prime Minister Modi proposed to include the African Union in the G20. The G20 countries represent around 85% of global trade in terms of value.