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While sub-Saharan African countries have been able to attract some degree of resource-seeking foreign direct investment ( FDI) due to their abundant natural resources, financial FDI inflows have proved to be elusive for the region, in spite of the widespread financial-sector adjustment programs that offer attractive incentive packages for financial multinational corporations ( MNCs). Literature surrounding the determinants of FDI inflows has mainly focused on manufacturing and real production activity. We analyzed the root causes of the weak administrative and institutional framework in Africa's banking industry, using Ghana as a case in point. Focusing on two financial MNCs as case studies, this article validates the significance of a thorough qualitative investigation in evaluating the explanations as to why most foreign banks do not invest in sub-Saharan Africa and why the few that do have relatively insignificant operations. The study also reveals that despite the far-reaching reforms, there are several structural constraints and deficiencies placed on financial MNCs that affect the size of the business they can conduct and their future investment decisions. One of the major issues prior to the financial-sector reforms in Africa was disintegration, and the restructuring was not designed to create an attractive location for foreign capital; hence, the low financial FDI inflows to Ghana in particular and Africa in general. © 2015 Wiley Periodicals, Inc. [ABSTRACT FROM AUTHOR]

International institutions like the IMF and IBRD were created to oversee stability in international financial affairs, facilitate the expansion and balance of growth of international trade and reduce poverty in the poorest countries at risk of being left behind in economic development. The main aims of these two institutions were designed to avoid a repetition of the disastrous economic policies that contributed to the Great Depression of the 1930's. In the mid 1980's, the Fund's lending operations increased dramatically. The exigency of the debt crisis caused the Fund to devise programs for adjustment over longer periods. These are known as extended arrangements and with other medium term programs, can be arranged through the Structural Adjustment Facility or the Enhanced Structural Adjustment Facility. Among steps required by the IMF and IBRD to improve the health of the economy and foreign direct investment climate are an improved trade environment, economic reforms, private-sector encouragement and a better regulatory framework. The full implementation of these policies initially proved costly for some African countries and hence resulted in either partial implementation or total abandonment of the reform program.