Ghana’s relations with China

This 2008 report by the South African Institute of International Affairs examines the multifaceted relationship between Ghana and the People's Republic of China, focusing on political ties, development assistance, trade, and foreign direct investment. It highlights China's role in addressing Ghana's infrastructure gaps in energy and telecommunications while noting the challenges posed by Chinese cost-competitiveness to local Ghanaian manufacturers.

• Ghana and China established diplomatic ties in 1960, with relations characterized by strong personal links between political elites and mutual strategic support. Ghana provided critical diplomatic support for China's reinstatement in the United Nations in 1971 and supported China during its 1962 border conflict with India. In return, China has provided grants, technical assistance, and infrastructure projects, such as the construction of the National Theatre in the early 1990s.
• China has become a major development partner for Ghana since 2001, focusing on energy, roads, and telecommunications. A primary example is the $622 million Bui dam project, funded by a $562 million mixed credit loan from the China Export and Import Bank, intended to help increase Ghana's energy capacity from 2,000 MW to 6,000 MW by 2015. China also provided a $30 million loan for the first phase of the National Communication Backbone and E-Government Project to link 10 regional capitals and 36 towns.
• Trade between the two nations follows a North-South model where Ghana exports primary commodities (cocoa beans, manganese, timber, rubber, and metal ores) and imports manufactured goods from China. While China has overtaken the US to become Ghana's second largest trading partner after Nigeria, this has resulted in a significant trade deficit. Between 2000 and 2005, imports from China rose from $93.13 million to $433.74 million, while exports grew only from $24.73 million to $31.26 million.
• Chinese imports pose a threat to local Ghanaian industries due to extreme cost competitiveness and the mass production of indigenous designs. For instance, the high-value handwoven Kente cloth is now mass-produced in China and sold in West Africa and the US. Local textile firms, such as Juapong Textile Mills (later Volta Star) and Printex, have struggled or shut down departments because they cannot compete with cheaper Chinese gray bafts and prints.
• Chinese Foreign Direct Investment (FDI) in Ghana is primarily concentrated in non-extractive sectors. Between September 1994 and June 2007, China led in the number of registered projects (283), although it ranked sixth in total value ($75.8 million). Most of these are small- to medium-sized enterprises (SMEs) in manufacturing, general trading, and tourism. In contrast, Chinese investment in the extractive sector is limited, with oil multinationals being slow to invest in Ghana's deep-water hydrocarbon resources.
• Chinese assistance is often tied to the promotion of Chinese businesses, which sometimes leads to the circumvention of Ghana's National Procurement Act. For example, the Local Organising Committee for the 2008 Africa Cup of Nations bypassed the Act to award stadium contracts to the Shanghai Construction Group, which underbid previous bids by more than 50%, reducing projected costs from $444 million to $157.2 million by early January.
• While Ghana is recognized for strong overall policy performance and stability, Chinese and other investors face bureaucratic hurdles and corruption. The report notes that it takes an average of 11 procedures and 42 days to start a business. Some public service officials are reported to deliberately delay processes to coerce applicants into paying bribes, which has led some Chinese investors to abandon projects.

APA

Idun-Arkhurst, I. (2008). Ghana’s relations with China. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2008/04/chap_rep_03_idun_arkhurst_200804.pdf

Chicago

Idun-Arkhurst, Isaac. Ghana’s relations with China. South African Institute of International Affairs, 2008. https://saiia.org.za/wp-content/uploads/2008/04/chap_rep_03_idun_arkhurst_200804.pdf.

Wikipedia

{{cite report |last1=Idun-Arkhurst |first1=Isaac |title=Ghana’s relations with China |publisher=South African Institute of International Affairs |date=2008 |url=https://saiia.org.za/wp-content/uploads/2008/04/chap_rep_03_idun_arkhurst_200804.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{idunarkhurst2008ghanas, author = {Idun-Arkhurst, Isaac}, title = {{Ghana’s relations with China}}, institution = {South African Institute of International Affairs}, year = {2008}, url = {https://saiia.org.za/wp-content/uploads/2008/04/chap_rep_03_idun_arkhurst_200804.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }