The Report: Ghana 2013
The Republic of Ghana has experienced decades of relatively stable economic and political progress. Economic growth has remained steady, particularly since the turn of the millennium, during which time Ghana’s GDP leapt from just $6.2bn in 2000 to $40.7bn at the end of 2012, according to data from the World Bank.
In 2012 Ghana celebrated two decades of a return to civilian, multiparty democracy, but the passing of President John Atta Mills in July of that year came as a shock. His vice-president, John Dramani Mahama of the National Democratic Congress, took over for the remainder of his term before winning the presidential elections in December 2012. As a result of its recent economic surge and stable environment, investment levels have continued to rise, as companies both foreign and domestic are eager to capitalise on the country’s wealth of natural resources and growing middle class.
Country Profile
Bordered by Burkina Faso to the north, Côte d’Ivoire to the west, Togo to the east and the Atlantic Ocean to the south, Ghana’s total land area is only slightly smaller than that of the UK at 227,540 sq km. With Accra as its capital, the country is divided into 10 administrative regions, which are further divided into a total of 216 districts. Over the past three decades Ghana’s population has more than doubled, growing from 11.6m in 1982 to 24.9m in 2012, according to figures from the World Bank. With more than 100 ethnic groups the population is highly diverse. Though certainly not without its obstacles, which include unemployment and an infrastructure deficit, Ghana continues to serve as a role model for peaceful, democratic rule in West Africa. With macroeconomic progress forecasted to continue, Ghana is in a good position to continue moving along the road of development. This chapter contains a viewpoint from President John Dramani Mahama and interviews with Mark Simmonds, Parliamentary Undersecretary of State, Foreign & Commonwealth Office; Olugbenga Ashiru, Nigerian Minister of Foreign Affairs; and Zafer Çağlayan, Turkish Minister of Economy.
Explore chapterEconomy
Outperformance remains the key feature of Ghana’s economy, seven years after the discovery of oil prompted new optimism in the country, which was then celebrating the golden jubilee of its independence. In real terms, GDP grew by 7.9% in 2012. This follows revised GDP growth of 15% in 2011, which was largely driven by the start of commercial oil production at the Jubilee field. Ghana is also the world’s second-largest exporter of cocoa beans and products, which accounted for 20.9% of export revenues in 2012. With growth in 2013 forecast to remain at a little under 8%, its oilfields set to expand and its gas infrastructure rapidly developing, Ghana’s future looks bright. Nevertheless, the country will need to tackle a number of challenges, notably in improving its infrastructure and dealing with poverty, as well as budgetary pressures that the government must face to enable it to achieve its medium-term goals of building stability and prosperity. This chapter contains a viewpoint from Kwesi Bekoe Amissah-Arthur, Vice-President of Ghana, and an interview with Mawuena Trebarh, CEO, Ghana Investment Promotion Centre.
Explore chapterBanking
The domestic financial sector has been fairly dynamic recently, with a number of mergers and new players arriving on the scene. However, approximately 70% of the population remains unbanked, and increasing access to financing is a government priority, especially for small and medium-sized enterprises. Given the large informal market, the size of the unbanked population and the challenge of integrating lower-income customers into the formal financial system, microfinance is taking off. However, some medium-term challenges will need to be navigated, including fragmentation at the lower end of the market, and ensuring equal implementation of good governance and data collection measures. This chapter contains an interview with Kofi Wampah, Governor, Bank of Ghana, and a roundtable with Charles Cofie, Board Chairman, Barclays; Samuel Adjei, Managing Director, Ecobank; Simon Dornoo, Managing Director, Ghana Commercial Bank; and Kweku Bedu-Addo, CEO, Standard Chartered.
Explore chapterCapital markets
While Ghana benefits from a roster of financial actors, the country’s capital markets are modest compared to continental exchanges in Cairo, Johannesburg, Lagos and Casablanca. The Ghana Stock Exchange (GSE) has just 36 equities and one exchange-traded fund listed on its equities exchange alongside a bond market dominated by government securities. In recent years the requirements for listing have been reduced, while the GSE has also been educating Ghanaians about the benefits of raising capital through equity. There is a long list of state-owned enterprises that could list on the bourse, and their doing so might encourage more private firms to follow suit. Ghana’s capital markets remain extremely attractive to investors seeking a toehold in the West African sub-region, in light of its robust growth, diversified commodity exports and political stability. This chapter contains an interview with Kofi Yamoah, Managing Director, Ghana Stock Exchange, and a viewpoint from David Awuah-Darko, Managing Director, IC Securities.
Explore chapterInsurance
While insurance penetration is still modest by emerging market standards, headline indicators are improving significantly. Over the past five years, revenue from insurance premiums has averaged 32% growth, with the life segment seeing 38.1% expansion over this same period. Microinsurance is expected to be a major growth driver given the cost-sensitivity of policies. As of 2010, between 160,000 and 250,000 people in the country had a microinsurance policy. Improved social and living conditions point to rising demand for insurance services in Ghana. Indeed, six of the world’s 10 fastest-growing economies over the past decade were in sub-Saharan Africa, including Ghana. Staff training, a concentrated market and a lack of capacity continue to be constraints, but recent reforms to boost capitalisation, encourage consolidation and improve awareness are set to help pave the way for continued increases in premiums. This chapter contains an interview with Lydia Lariba Bawa, Commissioner, National Insurance Commission.
Explore chapterEnergy
Since the discovery of offshore oil in 2007, Ghana has been adapting to the new reality of its hydrocarbons economy. In 2012 production at the Jubilee field increased 15% year-on-year to reach 27.4m barrels of crude oil, the entirety of which was exported for nearly $3bn. Oil production from the Jubilee field will likely plateau at around 140,000 bpd from 2013 to 2023. Gas production is also expected to peak at around 100m standard cu feet per day in 2015. The infrastructure needed to transport and process Jubilee’s gas resources is not expected to be complete until after 2013. As the gas processing plant nears completion in 2014, Ghana will be able to link its hydrocarbons output with its energy needs, bringing stability to the nation’s electricity sector. With GDP forecast to grow 8-9% in 2013, oil production and demand are both sure to continue rising. This chapter contains interviews with Kwesi Botchwey, Chairman, Ghana National Gas Company; and Aidan Heavey, CEO, Tullow Oil.
Explore chapterMining
Vast mineral resources have served as a primary driver of Ghanaian economic growth in recent decades, and 2012 was another banner year for the mining industry. Ghana was the world’s eighth-largest producer of gold in 2012. At the same time, production of bauxite, a key aluminium property, increased, while deposits of diamonds and manganese continued to attract international investment. Overall, mine production was reported by the Ghana Chamber of Mines to have grown by 23.5% in 2012, above the 18.8% rise posted in 2011. This translated into a 14% increase in total revenues year-on-year. However, limited port and rail facilities are beginning to pose a challenge for the industry, which is being forced to rely on less-than-ideal options for transporting equipment and mineral output. Efforts are under way to develop the supply chain and create new downstream manufacturing capacity, but progress is gradual. It is highly likely that mining output will slow as the market for gold flags. This chapter contains interviews with Alhaji Inusah Fuseini, Minister of Lands and Natural Resources; and Toni Aubynn, CEO, Ghana Chamber of Mines.
Explore chapterAgriculture
Often referred to as the backbone of Ghana’s economy, agriculture has traditionally been the largest sector and the biggest employer in the country, bolstered by diverse commodities and strong ties to European markets. However, agriculture’s economic contribution has dwindled as the sector has shown low growth in recent years. Its contribution to GDP fell in 2012, totalling 22.7% of GDP, compared to 25.3% in 2011. To counter this, the Food and Agricultural Sector Development Plan features six priority themes. Cash crops form a significant portion of exports, although transport gaps and seasonal production continue to be issues. The government is using growing petroleum revenues to beef up funding allocation for agricultural modernisation. Around $10.3m of the Annual Budget Funding Amount will be spent on the sector annually from 2013-23. As the government continues to expand and modernise agriculture, the industry should see steady growth over the coming years. This chapter contains an interview with Sunny Verghese, Group Managing Director and CEO, Olam International.
Explore chapterUtilities
With the economy growing at record rates, the authorities are working to keep pace with rising demand for water, power and sanitation. Compared to many neighbouring countries, Ghana’s utilities are in healthy standing, though the sector has not been without problems. The country’s water and sanitation systems are in need of improvement; only 64% of the population had access to clean water and 15% to adequate sanitation as of 2010. While Ghana has excess installed electric capacity, the Volta River Authority plants have not been operating at full capacity due to natural gas shortages and underperformance. To better supply growing electricity demand, the government plans to increase installed capacity to 3160 MW by 2015. Moreover, the government recently completed a master plan allowing the Ghana Grid Company to begin refurbishing and replacing outdated infrastructure. With new projects either on schedule for completion or about to be launched, Ghana’s water and power sector is likely to improve in the short term. This chapter contains interviews with Kweku A Awotwi, Chief Executive, Volta River Authority; and Charles Darku, Former CEO, GRID.
Explore chapterTransport
Ghana’s pursuit of middle-income status, bolstered by developments in the oil and gas sector, has put a corresponding strain on its transport networks, particularly at ports and airports. The government has committed to expanding facilities at airports to better meet the demands of a rising number of flights and an increasing amount of passengers. The first step of the proposed improvement works at Tema and Takoradi ports will be a dredging operation increasing draught to 16 metres at each facility. Major road upgrades include the Eastern Corridor Roads Project, which commenced in 2012 and will rehabilitate 800 km of road between Tema and Kulungugu. The government is seeking to improve these facilities through public-private partnerships. Although the largest projects will take some time in coming to fruition, the government has shown strong commitment to bolstering economic growth through infrastructure enhancement. This chapter contains interviews with Nils Smedegaard Andersen, Group CEO, A.P. Moller-Maersk Group; and Doreen Owusu-Fianko, Managing Director, Ghana Airports Company.
Explore chapterConstruction & Real Estate
The influx of capital and burst of growth that followed Ghana’s discovery of oil in 2007 led to a construction boom in 2011-12. Sourcing materials, however, has been problematic and in 2012 the World Bank reported that Ghana needs to spend $26bn on infrastructure, including basic road, housing and utilities upgrades, to support economic growth. As Ghana continues to channel new-found oil revenues into its infrastructure, and the private sector takes an increasingly active role in helping to meet housing shortfalls and infrastructure rehabilitation requirements, the sector is set to remain attractive to foreign investment. Property development in Ghana is growing, with increased demand in the residential, office and retail segments in major urban areas. Stronger collaboration between the private and public sectors could see housing become accessible to a largely untapped middle- and lower-class market. With expansion continuing at a steady pace and the middle class slowly realising its purchasing power, real estate in Ghana is set to offer long-term rewards for patient investors. This chapter contains an interview with Nana Kwame Bediako, President and CEO, Petronia City Development.
Explore chapterTelecoms & IT
Ghana has been successful in increasing penetration beyond the regional average. Having reached 100% by the end of 2012, penetration figures touched 102.7% as of February 2013 – figures that are well above the 53% norm for African countries and even the developing world average of 89%. However, average revenue per user is beginning to fall as penetration rises, prompting operators to increasingly focus on selling data, providing value-added services and lowering infrastructure costs. With six operators active, the telecoms market is quite competitive, and this has generated a host of ancillary benefits for the country. Ghana’s stable investment framework, combined with a strong education system, rising per capita income levels and increasing bandwidth capacity mean the nation offers sizeable opportunities in ICT.. The country has benefitted from improved networking infrastructure, by both the public and private sector. These sorts of investments will have significant knock-on effects beyond increasing access. In the meantime, Ghana’s IT sector will be driven by state spending on its e-government programmes such as the Eastern Corridor project. In the medium term, the private sector will begin to play a larger role in the development of the industry as more of the nation’s businesses begin to follow the government’s lead and move online. This chapter contains a roundtable with Phillip Sowah, Managing Director, Airtel; Michael Ikpoki, Former CEO, MTN; Adil El Youssefi, CEO, Tigo; and Kyle Whitehill, Former CEO, Vodafone.
Explore chapterIndustry & Retail
Given the country’s growing consumer population, limited product penetration and stable business environment within ECOWAS, the manufacturing sector in Ghana has impressive potential. However, like many countries in the region, commodities have taken precedence over industrial growth. As a result, manufacturing contributed 6.9% to GDP in 2012, a significant drop from 10.2% in 2006. Imports of consumer goods grew to $902.2m in the fourth quarter of 2012, a rise of 11.2% over the same period in 2011. As the economy expands and incomes rise, demand is expected to continue growing. While Ghana’s industrial sector faces its share of battles, the government is investing in a variety of projects that are geared towards tapping the country’s potential. The retail industry grew 14% in value between 2006 and 2011, buoyed largely by increased sales of fast-moving consumer goods. Although the domestic market is relatively small, with one of the world’s fastest-growing economies and an upwardly mobile population Ghana is increasingly attractive for producers and retailers of consumer goods. Formal retailers, however, continue to face a variety of challenges, from securing adequate space to informal competition and operating in a cash economy. This chapter contains interviews with Roland Agambire, Chairman & CEO, RLG Group; and Manoj Lakhiani, Chairman, Blow Group.
Explore chapterTourism
After cocoa exports and gold mining, tourism is the top foreign currency earner in Ghana’s economy, generating some $694m of foreign currency for the government in 2012. The industry is vital to overall economic growth and is expected to contribute 5.4% of GDP by 2023, growing at a rate of 4.5% between 2013 and 2023. The new 15-year National Tourism Development Plan, which runs from 2013 to 2027, aims to boost the sector’s performance via several partnerships with international organisations, including the EU and UNESCO. Hotel development in Accra and Takoradi is expected to continue to drive investment, providing for business travellers’ needs in a rapidly growing economy. In the long term, Ghana’s proximity to Europe, and the fact that multiple cultural and ecological destinations are located on or within a short drive from the country’s coastal strip, are factors that continue to open new opportunities for investment. This chapter contains an interview with Sampson Donkoh, Deputy Chief Executive, Ghana Tourism Authority.
Explore chapterHealth & Education
The continuing implementation of expansive reforms, including the Single Spine Salary Structure and updates to the National Health Insurance Scheme aimed at providing universal health care, made 2012 a turbulent year for Ghana’s health sector. The Ministry of Health has seen its budget swell as the government attempts to address deficiencies in the sector, and remains committed to delivering universal health care through infrastructure upgrades and enhanced staff development. Although some indicators have been declining, the overall health of Ghanaians has improved in recent years, and seems set to continue on an upward trajectory into 2014. As the largest recipient of state funding in the country, the Ministry of Education (MoE) is tasked with transforming the country’s economy from resource- to knowledge-based and ensuring that graduates are prepared to enter the fast-changing workforce. The main focus of the MoE’s strategic plan for 2010-20 is to provide basic education to all children, bridge the gender and accessibility gaps, and emphasise science and technical education. This chapter contains interviews with Dr Pilar Mateo Herrero, President, Inesfly; and Ernest Aryeetey, Vice-Chancellor, University of Ghana.
Explore chapterMedia & Advertising
A strong tradition of press freedom across all segments characterises the Ghanaian media sector. However, few providers have a truly national reach, with most focusing on a small market or a share of the largest cities. Radio remains a key outlet; its ability to reach rural regions makes it attractive, and it is a sought-after feature for mobile phone buyers. With Ghana reaching mobile penetration of 100%, media content that is easily consumable on mobile handsets will be increasingly important. New sources of advertising revenue have developed in the past three years as the number of international and domestic advertising agencies operating in Ghana has increased. Billboards remain the preferred advertising method for certain sectors, in particular telecoms, consumer goods and public awareness campaigns. The six telecoms companies account for roughly 30% of advertisements that appear on the nation’s most popular radio and television stations. While traditional forms of advertising will continue to be important, a number of new marketing channels are expected grow in relevance over the next few years.
Explore chapterTax
In conjunction with Deloitte & Touche, OBG explores the taxation system, examining Ghana’s investor-friendly environment. This chapter contains a viewpoint from Andrew Opuni-Ampong, Managing Partner, Deloitte & Touche.
Explore chapterLegal Framework
OBG introduces the reader to the different aspects of the legal system in Ghana, in partnership with Bentsi-Enchill, Letsa & Ankomah. This chapter contains a viewpoint from Kojo Bentsi-Enchill, Managing Partner, Bentsi-Enchill, Letsa & Ankomah.
Explore chapterThe Guide
This section includes information on hotels, government and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress, business hours and electricity.
Explore chapterTable of Contents
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