Industry & Retail
From The Report: Ghana 2016
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While Ghana boasts a number of advantages for manufacturers, including access to a 300m-person regional market, a host of raw material inputs and competitive labour costs, 2014 was a particularly challenging year for the industrial sector. In large part this was due to a declining currency, power shortages, limited credit and high overhead costs. Nevertheless, industry still accounts for 28.4% of GDP and generated output worth $8.5bn in 2014. The government’s goal is to increase annual revenues from non-traditional exports from $2.3bn to $5bn by 2017, as well as reduce the trade deficit. While the Ghanaian retail market is relatively untapped, rising incomes suggests its time is coming. Research indicates that over 479,000 households, or 9% of the total, will be in the $10,000-per-year-plus bracket by end-2015. With a large and growing middle class benefitting from higher disposable incomes, retail spending is expected to reach $11bn by 2019.

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Overview

Testing times: Moving to reinvigorate manufacturing and overcome obstacles affecting growth
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While Ghana boasts a wide array of long-term advantages for industrial producers, including access to a 300m-person regional market, raw material inputs ranging from metals to cocoa, and competitive labour costs, 2014 was nonetheless particularly challenging for the country’s industrial and manufacturing sector, in large part due to a declining currency, power shortages, limited credit and high overhead costs. Ghana recorded GDP growth of 4% in 2014, according to the Ghana Statistical Service…

Analysis

Cost pressures: Power shortages and the declining currency are having a notable impact on the sector
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Access to electricity supplies remains the biggest concern for industries in Ghana, according to those involved in the sector. “The major concern is energy supply. The impact of power outages is huge for businesses, and the inconsistencies in the load management schedule makes planning very difficult,” John Defor, a policy research officer at the Association of Ghana Industries (AGI), told OBG. “Companies have staff who report for work and there is no power, but their wages must still be paid…

Analysis

Sewing up support: Textile manufacturers face competition from Asian imports
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The textile industry in Ghana was once a leading player in the country’s industrial sector, employing about 30,000 workers. That number is now closer to 3000 and dropping steadily. The decline is largely due to competition from cheap imports, predominantly from Asia, which is making it difficult for Ghanaian textile producers to prosper in the market. “The main challenge is the influx of pirated copies from Asia. They are copying our designs, using our brand names and dodging paying any taxes,”…

Analysis

Provenance plan: Local goods are being promoted domestically to create jobs and bolster manufacturing
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In line with similar efforts elsewhere in the world, Ghana has targeted the promotion of domestic Made-in-Ghana brands and is attempting to change the behaviour of Ghanaians towards locally produced goods. Beyond simply promoting domestic industry and culture in general, the push is aimed at creating jobs and reviving struggling sectors such as the textile industry. In 2014 Ghana imported $17bn worth of goods, while it exported goods worth $13bn, according to the Ministry of Trade and Industry. This…

Analysis

Bubbling up: Growing household spending will benefit manufacturers of fast-moving consumer goods
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In recent years multinational fast-moving consumer goods (FMCG) companies have been turning their attention to the expanding consumer markets in Africa, with beverage companies often in the vanguard. This is certainly visible in Ghana, where research firm BMI forecasts that total household spending will reach $8bn in 2015, with a compound annual growth rate of 7.5% alone for carbonated soft drinks sales between 2013 and 2017. “Ghana has a very large market for FMCGs, with a mix of international…

Overview

To market, to market: New malls opening as purchasing power rises, but retailers continue to face challenges
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Although formal retail operations have continued to expand in recent years, driven in part by Ghana’s emerging middle class, the sector is still dominated by traditional and informal open-air markets, which continue to make up around twothirds of total sales, according to global management consultancy A.T. Kearney. Spending Is Up Market research forecasts retail spending to increase from $8bn in 2015 to $11bn by 2019, thanks largely to the growing middle class. After a rebasing exercise, in 2010,…