8 Geese Flying to Ghana? A Case Study of the Impact of Chinese Investments on Africa’s Manufacturing Sector

Abstract

China has significantly changed its engagement mode with Africa, shifting from trade of natural resources to investment in industrial sectors. This article uses Ghana as a case study to examine why and how Chinese investors come to set up factories in Africa’s challenging business environment. Through first-hand scoping study on the ground, the author reveals that the pressure of China’s industrial upgrading and the vast potential of Africa’s growing market are the main drives for Chinese manufacturers. Clustering and industrial zones proved to be effective instruments to help Chinese manufacturers grow in Ghana. The clustering of numerous small and medium-sized enterprises also facilitates linkage building between Chinese projects and the local economy. The ‘flying geese’ phenomenon is emerging in Ghana’s manufacturing sector, but the weak macro-economy and the lack of industrial supports largely slow down the progress of Chinese investments and reduce the spillover effects.