Our comprehensive assessment of Ghana's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Ghana, as well as the latest industry developments that could impact Ghana's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Ghana before your competitors.

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 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. Despite this positive outlook, there are some risks that need serious consideration, including 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 80th place out of 170 countries covered, between its regional peer Botswana and Georgia and far ahead of Africa's economic powerhouse Nigeria, which falls in just 136th place. Furthermore, when considering some of the most attractive emerging...

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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 60th place globally out of 170 states.

With regards to the school education system in Ghana,...

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Ghana Logistics

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Despite hopes that Ghana's new found oil wealth will transform the country into one of Africa's most successful growth stories, the dilapidated state of the country's 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. Due to the risks associated with operating in Ghana, we award it a score of 44 out of 100 in the BMI Logistics Risk Index, below the global average. While this score is uncompetitive from a global perspective, the country does perform well in a regional comparison, ranking sixth out of 44 Sub-Saharan Africa (SSA) states, increasing its attractiveness to investors seeking to an entry point to Africa.

By far the greatest logistics risk posed to investors is Ghana's transport network, which lacks diversity, is severely underfunded and is poorly...

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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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BMI View: Fresh doubts have emerged about the financial stability of cocoa regulator COCOBOD and its capacity to sustain support to farmers given the difficult fiscal situation facing the government. Nevertheless, the recent stabilisation of the cedi and announcement of a higher support price should balance these risks. The launch of a new government project to revitalise the poultry sector suggests that the challenges facing the segment as it struggles to compete with imports are being taken seriously and, although firm proposals are thin on the ground, we remain optimistic about the industry's future. One of the main constraints on growth will be high feed prices, giving added urgency to programs aimed at increasing corn yields. We expect production levels to continue to climb gradually in the grains segment although concerns remain in the near future regarding food price...

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Autos

Ghana Autos

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We forecast vehicle sales to grow at an average of 5.4% per annum over the 2014-2018 period, to hit 82,889 units by 2089. This forecast is based on data from the Ghana National Road Safety Commission.

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 and 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 would have a dampening effect on autos demand.

Our Country Risk team...

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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:   The Ghanaian economy is going through a tumultuous period at present, but the outlook for real GDP growth over the coming years is bright, nevertheless. We forecast that real GDP growth will fluctuate between 5.9% and 8.0% over 2015-2018, following a dip to 4.7% in 2014 from 7.1% the previous year. There is a dearth of data for private consumption in Ghana, but anecdotal evidence points to a sharp slowdown in 2014.

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 = +7.00%; forecast CAGR 2013 to 2018 = +8.99%.

  • 2014 carbonated drinks volume sales = +8.00%; forecast CAGR 2013 to 2018 = +9.99%.

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Information Technology

Ghana Information Technology

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BMI View:   The increase in economic activity and improvements in data connectivity will drive investments in new IT services and solutions by businesses in Africa. One of the key growth areas is financial services, with emphasis on e-commerce and customer service. With businesses across key consumer-centric industries such as retail, aviation, telecoms and public utilities looking to build up their e-commerce capabilities, we see the regions' banks investing in solutions to enable them cope with new demand from corporate and individual customers.

Headline Expenditure Projections

Ghana

Computer Hardware Sales: GHS718mn in 2013 to GHS866mn in 2014, +22.1% in local currency terms. The government's ambitious Basic Schools Computerisation project and e-...

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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, mean s 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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Espicom Industry View : Ghana represents a comparatively small medical device market of just under US$100mn, similar in size to Kenya and Oman. Per capita spending is low at US$3.6 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 and further high growth, at a 12.8% CAGR, should see the market become increasingly attractive to foreign suppliers.

Headline Industry Forecasts

  • In 2013, the medical device market was estimated at US$94.9mn, equal to US$3.6 per capita. The market is projected to grow to US$173.4mn by 2018, at a CAGR of 12.8%. Double-digit growth is anticipated across all sectors of the market.

  • Imports more than doubled to US$112.9mn in...

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Mining

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 US D3. 6 bn 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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Ghana Mining

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BMI View: The outlook for iron ore production in West Africa is increasingly precarious , as t he collapse in global iron ore prices and outbreak of the Ebola virus coalesce to slash mining companies' revenue , limit financing options , force the evacuation of workers and disrupt supply chains. 

The coalescence of a sharp downturn in global iron ore prices and the outbreak of the deadly Ebola virus will dent West Africa's growth outlook as mining companies suffer reduced revenue, difficulties in accessing finance and logistical disruption.

Iron Ore Boom To Come Under Threat
Select Countries - Iron Ore Production (mnt)
...

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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:   Continued depreciation of the Ghanaian cedi has led us to downgrade our pharmaceutical and healthcare forecasts in US dollar terms in the short   term. In the long   term, we have a positive outlook for the market due to the increasing popularity of the National Health Insurance Scheme and the government's greater emphasis on the pharmaceutical sector and initiatives to combat the presence of counterfeit medicines.  

Headline Expenditure Projections

Pharmaceuticals: GHS859mn (USD416mn) in 2013 to GHS1.01bn (USD334mn) in 2014; +17.2% in local currency terms and -19.7% in US dollar terms. Forecast revised slightly downwards from Q314 in local currency...

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Power

Ghana Power

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BMI View: Ghana has been facing a deepening energy crisis since late H114, sparked by a confluence of factors including the country ' s unsustainable budget deficits, rising cost of funds and fuel, and a spate of bad weather, all of which have exacerbated the impact from poor planning and limited investment in the sector. Unsurprisingly, the Ghanaian authorities have displayed increasing interest to raise the level of private sector investment in the sector, in hope to reduce the country ' s heavy reliance of hydroelectric generation, and inked a USD498mn deal with the US in August.

With privatisation of state-owned Electricity Company of Ghana (ECG) largely out of the picture, the attractiveness of Ghana's power sector remains dim compared to its peers in the region, who have made headway in their...

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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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