One of the main insights of the New Economic Geography is that as interregional transport costs fall, agglomeration economies and interregional migration will lead to higher concentration of firms and workers in economically dense locations. In other words, improving inter-regional accessibility can increase spatial differences in production between lagging and leading regions. In this paper, we examine the importance of infrastructure connectivity, local human capital and other regional endowments in the location decisions of manufacturing firms in Ghana. We find that agglomeration economies and local education levels have a positive effect on location decisions and productivity of Ghanaian manufacturing. Proximity to markets also matters: longer travel time to the nearest city of 100,000 or more reduces the attractiveness of a location. Further, improvements in market access increases economic density in the leading Southern region, where as the North loses manufacturing activity with better connectivity to markets. We also find that the placement of transport links involves spatial efficiency-equity tradeoffs -- improving connectivity in the North reduces national productivity by 0.15 percent; in contrast improving connectivity in the South increases manufacturing productivity by 3.1 percent nationally. While economically integrating lagging regions is an important policy priority in Ghana, the government may want identify instruments that are better suited to directly improve welfare of local residents. Lessons from the WDR2009 “Reshaping Economic Geography” calling for investments in health and education in lagging areas are likely to be more useful.