Ghana is widely regarded as a rapidly maturing African democracy, with peaceful elections and transitions of power since the multi-party system was introduced in 1992. Ghana's abundant natural resources are a blessing in times of elevated commodity prices, and there is scope to ramp up output further. Multilateral debt relief has reduced Ghana's external liabilities significantly, freeing up former debt servicing funds for pro-poor spending and greater developmental efforts.

We keep our clients informed of the latest market moves and political developments in Ghana, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 14 of Ghana’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert research teams. Our aim is to keep you ahead of the curve, so you can operate with confidence in Ghana.

Country Risk

Ghana Country Risk

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Core Views:

  • Economic growth in Ghana will be buoyant over 2015-2018 thanks to improving power supplies, rising oil production and strong investment inflows - the latter encouraged by IMF policy oversight.

  • Foreign investment inflows will be robust thanks to Ghana's abundant natural resources and relative political stability.

  • The current account deficit and fiscal deficit will remain key structural weaknesses in the economy.

  • Peaceful protests against economic hardship will continue, despite the fact that the government has approached the IMF for assistance. Ghanaians are wary of the conditions that may be attached to IMF support.

Major Forecast Changes:

  • No major forecast changes.

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Ghana Operational Risk Coverage (9)

Ghana Operational Risk

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Ghana is a relatively risk-intensive country by both regional and global standards, but it does present an attractive environment for investors because of its strong economic openness, cheap and widely available unskilled labour pool, relative political stability, and promotion of foreign direct investment. Risks that require serious consideration include the rise in cyber- and non-violent crime (burglaries and petty theft), poor quality transport network, limited skilled labour pool, unreliable electricity supply, and limited banking sector penetration. With regards to overall Operational Risk, Ghana sits comfortably in the middle of our rankings, in 77th place out of 170 countries globally, and in fifth place regionally. This puts it ahead of Botswana but behind Namibia, with 49.3 and 51.8 points respectively. Moreover, Ghana sits well ahead of neighbouring Nigeria, whose high risk security environment pulls it down into 18 th position.

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Ghana Crime & Security

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Although Ghana faces some tangible security challenges across all fronts, the risks to investors remain low in comparison to many other Sub-Sahara African (SSA) states. Nonetheless, crime levels in Ghana warrant a degree of vigilance when operating in the country. Foreign workers, expatriates, and tourists are frequently the victims of non-violent crimes such as pick-pocketing because of their perceived wealth and this is reflected in Ghana's uncompetitive score of 38.4 out of 100 for Foreign Worker Vulnerability. Burglaries of commercial and residential property have also become more widespread, resulting in higher insurance premiums and increased security expenditure for businesses and individuals. These crimes tend to be opportunistic, however, so with some basic precautions they can be largely avoided. Due to these considerations, we score the country 51.7 out of 100 for its overall Crime and Security risk. This score places the country tenth within Sub-...

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Ghana Labour Market

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BMI View: From a regional perspective, Ghana offers limited risks to incoming investors and businesses with regard to the labour market. The key risks are the underfunded and underutilised education system, which has resulted in a labour pool that is largely unskilled and devoid of basic numeracy and literacy skills, as well as high costs in the form of severance pay and absenteeism, due to low life expectancy. However, these risks are outweighed by a number of advantages, which include competitive labour costs, highlighted by a minimum weekly wage of USD27.6, a relatively large availability of workers (15.4mn) and flexible employment conditions. Overall, Ghana's score of 54.8 out of 100 ranks the country in first place within Sub-Saharan Africa (SSA) for Labour Market Risk and in 60th place globally out of 170 states.

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Ghana Logistics

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Despite hopes that Ghana's newfound oil wealth will transform the country into one of Africa's most successful growth stories, the dilapidated state of the its roads, insufficient water network and frequent power shortages means that investors face a tough operating environment and will have to factor in higher start-up costs if they are seeking to expand into this market. Because of this, we award Ghana a score of 44.1 out of 100 in the BMI Logistics Risk Index. While this score is uncompetitive from a global perspective, the country does perform well in a regional comparison, ranking fifth out of 44 Sub-Saharan African (SSA) states, increasing its attractiveness to investors seeking an entry point to Africa.

Ghana's economy is based on the commercialisation of traditional export earners - such as gold and cocoa - as well as the more recent discovery of oil from its Jubilee oil fields. The country is therefore heavily...

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Ghana Trade & Investment

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Ghana is a regional outperformer for Trade and Investment Risk thanks to the steady inflow of foreign direct investment and a regulatory environment that is both clear and usually beneficial for foreign investors. The country is ranked sixth out of 44 countries in Sub-Saharan Africa (SSA), with a score of 50.7out of 100. This score, however, is less competitive on an international level, placing just 76th out of 170 states, between Albania and Jamaica. We attribute this to the high risks stemming from poor banking sector penetration and a legal system that is largely inadequate in its ability to protect intellectual property rights.

Government Intervention represents Ghana's highest risk segment in the Trade and Investment Risk Index, largely due to some relatively extensive red tape that hinders business start-ups in the country. Although, Ghana's tax environment is as equally hampered by bureaucratic hurdles that make it a time consuming...

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Ghana Industry Coverage (14)

Agribusiness

Ghana Agribusiness

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Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)

BMI View: We believe that the Ghanaian cocoa sector will post reasonably strong growth over our forecast period to 2018/19. High cocoa prices will encourage production, while the government has pledged schemes in order to encourage yield growth. Stabilisation of the cedi and the announcement of a higher support price will also aid the sector. The launch of a...

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Autos

Ghana Autos

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We forecast vehicle sales to grow at an average of 3.9% per annum over the 2015-2019 period, to hit 83,412 units by 2019. This forecast is based on data from the Ghana National Road Safety Commission.

Domestic Demand To Drive Autos Growth

We believe a number of factors will generate wealth for the country and consequently boost consumer spending in the coming years. The Ghanaian economy will enjoy strong economic growth over the medium-to-long term, propelled by the nascent oil and gas sector. Ghana's abundant natural resources and fast growth trajectory will bode well for strong foreign investment inflows over the next five years.

However, both economic and political risks remain elevated in the short term. The local currency remains weak amid the sizeable current account deficit. Furthermore, the high interest rate regime in place to combat runaway inflation...

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Commercial Banking

Ghana Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Ghana Food & Drink

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BMI View: There is a dearth of data for private consumption in Ghana, but anecdotal evidence points to a slowdown. Looking beyond 2014, we expect a slow recovery in private consumption. Confidence will pick up as currency depreciation slows, power supplies improve and foreign investment rises. Despite the ongoing economic turmoil in Ghana, real GDP growth will be strong over the coming years, fluctuating between 6.0-8.0%. Forthcoming IMF support will underpin investor confidence and rising oil & gas output will provide a significant boost to the economy.

Headline Industry Data

  • 2014 per capita food consumption (local currency) = +10.7%; forecast compound annual growth rate (CAGR) 2013 to 2018 = +12.1%.

  • 2014 beer volume sales = +7.0%; forecast CAGR 2013 to 2018 = +9.0%.

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Information Technology

Ghana Information Technology

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BMI View: The oil-producing African nations draw a large portion of government revenues from petroleum exports, exposing them to the sharp decline in crude oil price in late 2014 and early 2015. This will weigh on public spending and private investment in the short-term, including investments in new IT products and solutions.

Headline Expenditure Projections

Ghana

Computer Hardware Sales: GHS866mn in 2014 to GHS1.027bn in 2015, +18.5% in local currency terms. The government's ambitious Basic Schools Computerisation project and e-governance initiative will be the main growth driver.

Software Sales: GHS176mn in 2014 to GHS220mn in 2014,...

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Infrastructure

Ghana Infrastructure

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BMI View:   We remain optimistic toward Ghana's five year construction sector outlook, despite further downgrading our growth estimate for 2014. We expect annual average growth of 7.5% between 2015 and 2019 as a result of investment across the power, transport and residential and non-residential construction sectors. Growth will be supported by the Ghana Infrastructure Fund, a recent Eurobond issuance and private investment. 

Over the five and ten year horizon we expect Ghana's construction industry to experience strong growth. However, the current fiscal crisis is weighing on our near-term outlook, with growth downgraded to 3.2% for 2015 (from 4.5% previously). Growth of just 2% was recorded in H214, with much of this slowdown due to a contraction of -1% in Q214.

While we expect the construction sector to be one of the more resilient to the...

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Insurance

Ghana Insurance

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BMI View: Innovation by the insurers, in terms of products and distribution strategies, means that they are reaching significant numbers of new users in both segments. Foreign (and, in particular, South African) insurers view Ghana as an attractive commercial opportunity. Because of continuing price competition, which is suppressing rates, premiums should grow more slowly in the non-life segment than in the life segment.

Both the life and the non-life segment of Ghana's insurance sector are small and underdeveloped. Nevertheless, a number of factors are encouraging, including the innovative strategies of the companies themselves, a positive environment for micro-insurance, the growing involvement of foreign majors and the potential for growth through sales of insurance to first-time users. In addition, it is easy to identify recent initiatives on...

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Medical Devices

Ghana Medical Devices

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BMI Industry View : Ghana represents a comparatively small medical device market of just under US$60mn. Per capita spending is low at US$2.3 indicating considerable potential for expansion. Primarily supplied by imports, the market has enjoyed one of the world's highest CAGRs over the 2008-2013 period, but a sharp contraction in the market in 2013 and 2014 will result in slower growth being registered over the 2013-2018 period.

Headline Industry Forecasts

  • In 2013, the medical device market was estimated at US$59.6mn, equal to US$2.3 per capita. The market is projected to grow to US$69.9mn by 2018, at a CAGR of 3.2%. Growth is...

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Mining

Ghana Mining

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BMI View: West Africa's iron ore production growth will face difficult times ahead, as the collapse in global iron ore prices and outbreak of the Ebola virus will slash mining companies' revenue, limit capital expenditure options, force the evacuation of workers and disrupt supply chains.

Weak global prices and the Ebola virus outbreak will dent West Africa's growth outlook as mining companies suffer reduced revenue, difficulties in obtaining finance and lacking infrastructure.

Growth To Be Gradual
Select Countries - Iron Ore Production (Mn tonnes)
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Ghana Mining

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BMI View:  Ghana is set to remain Africa's second-largest gold producer, after South Africa, as investment continues to flow into the mineral-rich country. The country boasts one of the most favourable business environments in the region, with a democratic and stable government, which contrasts sharply with many of its resource-rich neighbours. Ghana's mining sector is set to reach USD3.6bn in 2018, up from USD3.3bn in 2013, as bauxite and gold production see modest increases. We expect gold to be the main driver of growth, but see bauxite playing a growing role.

Output Growth To Converge
Ghana - Production Growth (% change y-o-y)
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Oil & Gas

Ghana Oil & Gas

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BMI View: We hold to our bullish view on the Ghana oil and gas sector, as production from Jubilee, TEN and Sankofa support rising production growth. Rapid economic expansion will also see a strong increase in consumption. And as consumption growth begins to outpace production, we forecast a mounting dependency on imported fuels and natural gas, at the end of our forecast period.

Headline Forecasts (Ghana 2012-2018)
  2012 2013e 2014f 2015f ...

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Pharmaceuticals & Healthcare

Ghana Pharmaceuticals & Healthcare

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BMI View: We anticipate that the continuing roll-out of biometric registration and expansion of the community-based health planning and services scheme will lead to greater uptake of the National Health Insurance scheme (NHIS) and hence increasing demand for pharmaceuticals. A risk to our outlook is the continued non-payment of affiliated healthcare service providers by the government, posing questions regarding the sustainability of the scheme. Domestic manufacturers will gain momentum following the removal of taxes on imported pharmaceutical raw materials.

Headline Expenditure Projections

Pharmaceuticals: GHS859mn (USD416mn) in 2013...

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Power

Ghana Power

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BMI View: Ghana continues to face a deteriorating energy situation, with the vicious cycle of energy shortages and growing debts kept in motion by factors including the rising cost of funds, disruption to fuel supplies and a spate of bad weather. Even with the government's latest moves to appoint a new Electricity Commission of Ghana (ECG) and appointment new members to its board, there appears little means to rectify the situation and alleviate the impact from poor planning and limited investment in the power sector previously. Given that the government's capability to finance investments in generation capacity will be capped in view of the loan package from the IMF, we believe the government will have to turn to seek help from the private sector.

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Telecommunications

Ghana Telecommunications

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BMI View: The NCA's plan to license MVNO players in Ghana's already crowded mobile market will push price competition to unsustainable levels. This will encourage operators to seek further cost efficiencies and could trigger consolidation among the smaller players.

Key Data

  • The Ghanaian mobile market grew by 2% quarter-on-quarter (q-o-q) in Q314, compared to q-o-q growth of 1.9% in the previous quarter.

  • The mobile data market grew by 7.5% q-o-q in Q214, down sharply from 25.8% q-o-q growth in Q114. The market is driven by expanding network coverage, falling tariffs and availability of low-cost smartphones.

  • The fixed-line market contracted by 2.2% q-o-q in Q314 and 6.1% year-on-year (y-o-y) in the 12 months to September 2014. Q314 was the sixth consecutive quarter of...

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