Can African Countries Attract Investments without Bilateral Investment Treaties? The Ghanaian Case

Can bilateral investment treaties (BITs) play any singular or distinctive role in attracting foreign direct investment (FDI) to African countries? This article analyses data on FDI flows to Ghana from countries with which it is a party in BITs and those with which it is not. The main finding is that most FDIs in Ghana come from countries with which it does not have BITs, meaning in effect that investments can be attracted without BITs. It also means that BITs do not play any statistically significant role in attracting FDI from Ghana’s contracting parties to BITs when compared to FDI inflows to Ghana from other countries. This evidence refutes the role of FDI attraction conventionally attributed to BITs. Based on the data analysed, BITs are not uniquely relevant for investment attraction to Ghana and, by extension, similarly placed African countries, which thus need to rethink both the importance they attach to BITs and whether FDI could be regulated based solely on municipal investment law. Introduction According to the United Nations Conference on Trade and Development Investment treaty making has reached a turning point. The number of new international investment agreements (IIAs) concluded in 2017 (18) was the lowest since 1983. Moreover, for the first time, the number of effective treaty terminations outpaced the number of new IIAs. In contrast, negotiations for megaregional agreements maintained momentum, especially in Africa and Asia (UNCTAD 2018, p. xiii). The decline in the making of IIAs or investment treaties and a simultaneous increase in the termination of IIAs point to a rejection of the