Ghana’s ICT sector has proven to be one of the country’s fastest-growing industries in recent years, with key market players offering more innovative products as data traffic surged amid the Covid-19 pandemic in 2020. Looking ahead, policy efforts are likely to bolster growth due to the strategic importance of ICT in digital and industrial development plans.
Structure & Oversight
The ICT sector incorporates a range of telecoms firms and internet service providers, infrastructure operators, software companies and start-ups. The telecoms industry was liberalised in the early 1990s and has become increasingly competitive in the intervening decades, with four mobile network operators, three fixed network providers and four broadband wireless access companies in the market as of the first quarter of 2021, according to the National Communications Authority (NCA). Meanwhile, the Ministry of Communications and Digitalisation (MoCD) oversees the ICT subsector, and is responsible for developing national policy to deliver cost-effective infrastructure and services and enhance economic competitiveness.
The NCA, an agency under the MoCD, promotes fair competition, grants licences and authorisations, and monitors quality of service in the telecoms industry. The National Information Technology Agency (NITA), which serves as the ministry’s IT policy-implementation arm, plays a role in driving the digital transformation of the public sector (see analysis).
National policy emphasises the development of the ICT sector – a core component of the economic transformation agenda and post-pandemic recovery plans. ICT is also described as a pillar of the manufacturing sector’s revival, in support of Ghana’s Industrial Transformation Agenda, while digitalisation is seen as a critical government intervention aimed at removing red tape and improving efficiency.
Under the Ghana Beyond Aid policy framework, the government’s goal is to increase the contribution of ICT service exports from a 2017 baseline of 0.01% of GDP to a target of 1% in 2028, and to establish Ghana as an African leader in the digital economy.
In response to the pandemic, the Ghana Covid-19 Alleviation and Revitalisation of Enterprises Support (CARES) programme seeks to establish robust ICT infrastructure to support businesses and public service delivery (see analysis). Fast-tracking digitalisation – which includes investing, consolidating and expanding the fibre backbone to improve overall connectivity – is also a key pillar of the government’s aim to revitalise and transform the national economy under the Ghana CARES programme.
Since the rollout of the government’s public sector digitisation policies in 2017 (see analysis), Ghana has significantly improved its ranking on the E-Government Development Index, which provides a composite measure of three dimensions of e-government: online services, telecommunications connectivity and human capacity. In 2016 it ranked 120th globally and 11th in Africa; by 2020 it had risen to 101st and fifth, respectively, and was the leader in Western Africa on the first two subcomponents of the index.
Performance & Size
The ICT sector has posted steady growth over the past decade, increasing its contribution to GDP from $900m, or 2.3% of the total, in 2014, to $1.7bn and 3.6%, respectively, in 2017. By 2020 its share had risen to 3.9%, according to the Ghana Statistical Service (GSS). Following the lockdowns instituted in response to Covid-19 in 2020, information and communications was the fastest-growing subsector of the economy in early 2021, with year-on-year (y-o-y) growth of 22.1% and 20%, respectively, in the first and second quarters.
There were 3134 information and communications establishments in operation and 29,733 people employed in the sector as of 2018, according to the most recent comprehensive Integrated Business Establishment Survey conducted by the GSS. By 2020 the sector workforce had risen to around 39,500, as per comparable data from GSMA Intelligence.
Penetration & Use
Growth in the ICT sector is largely attributable to significant developments in telecommunications. Increased investment in communications infrastructure, lower telecoms prices and a competitive market have led to broad mobile network coverage and high penetration rates. The expansion of telecoms services has fuelled innovation and investment in ICT subsectors such as software, application platform development and mobile money, and has given the country a solid base from which to develop its digital economy.
Mobile service penetration, measured by unique subscribers, is relatively high, at 19m, or 67% of the population, as of 2020, above the sub-Saharan African average of 44%, according to the most recent country report from GSMA Intelligence.
A 2019 household survey on ICT conducted by GSS and published in March 2020 provides a clearer indication of mobile phone penetration by age group, area and features. According to the survey, 82% of adults own a mobile phone. Of those with SIM cards, 63.1% own one SIM card and 36.9% own two or more SIM cards. Nearly half (47.9%) of mobile phone users have a basic phone, while 46.1% have a smartphone and 12.8% have a feature phone. Predictably, smartphone penetration is higher in urban areas, at 58.4% of owners, compared to 28.1% in rural areas.
Aside from traditional voice calling and SMS, the most popular mobile phone usage cited by survey respondents was financial activities (60.1% of responses), which includes mobile money. Entertainment was another popular use (37.9%), followed by internet access (35.1%), social media (26.3%), and taking photos or videos (5.2%).
Total mobile voice subscriptions, which do not account for unique SIM subscribers, stood at 133.1% of the population, with 41.4m registered subscriptions as of the first quarter of 2021, according to data from the NCA. Total registered subscriptions were down marginally from 138.9% in 2020.
Internet penetration as a share of the total population has increased over recent years, with significant growth recorded in 2020 as the pandemic led to higher data consumption. Internet penetration stood at 35% in January 2019 and increased to 48% in January 2020. Penetration continued to grow, albeit more marginally, to 50% in January 2021.
Total mobile data subscriptions stood at 22.9m at end-March 2021, representing a penetration rate of 73.7% of the population. This was down 13.3% from 26.5m subscribers and 85.6% penetration as of the end of 2020. Fixed data penetration is low, standing at 0.3% and 78,068 subscribers as of end-March 2021, up from 75,137 one year earlier.
There are four mobile operators in the market: MTN, Vodafone, AirtelTigo and Glo. MTN is the largest, with a 56.5% market share of voice subscriptions as of March 2021. Vodafone held a 21.5% market share, followed by AirtelTigo, with 20.1%. Glo is the smallest player, with a market share of 1.9%, although this was up from 1.7% in 2020. In terms of mobile data subscriptions, MTN held a 68.1% market share, followed by AirtelTigo (16.6%), Vodafone (13.6%) and Glo (1.7%).
In June 2020 the NCA declared its intent to classify MTN, Africa’s largest telecoms company, as a significant market power in the voice, data and SMS market, under the Electronic Communications Act. The purpose of the declaration was to increase competition within the industry by placing special regulatory restrictions on the company. In November 2021 MTN followed directives by the regulator and announced that it would implement on-net/off-net measures to ensure parity for voice and SMS special plans, promotions and bundle offers.
Following AirtelTigo’s October 2020 announcement that it would exit the Ghanaian market, the government acquired full ownership of AirtelTigo, including all its customers and assets, in November 2021. Per the MoCD, the purchase is of strategic importance as the government continues to grow its portfolio of digital assets and maintains its commitment to support the competitiveness of the sector.
In the fixed-line voice market, Vodafone remains the dominant player, with a 98% market share and 303,749 subscriptions as of March 2021. AirtelTigo held a 1.2% share with 3565 subscriptions, down from 2.3% and 6669, respectively, one year earlier. A relative newcomer to the fixed voice market, MTN recorded 2687 subscriptions and a 0.9% market share in the first quarter of 2021.
Mobile data traffic grew by 30.2% y-o-y in the first quarter of 2021, from 157.69bn MB to 205.38bn MB. Broadband wireless data traffic also expanded substantially, from 3.63bn MB at the end of the first quarter of 2020 to 6.85bn MB one year later, representing growth of 88.7%. The surge in data traffic was precipitated by lockdown measures enacted in response to the onset of the Covid-19 pandemic, which forced many Ghanaians to work or study from home. “Ghana was not fully prepared for digitalisation with the infrastructure that was in place; however, the pandemic forced the country to jump into the digital age,” Moses Baiden, CEO of Margins Group, a Ghanaian digital security firm, told OBG. “Companies found that people are more effective when they use digital tools,” he added.
To help alleviate the increased burden, the NCA allocated additional spectrum to MTN and Vodafone at no extra cost for a period of three months beginning in April 2020. However, in response to persistently high demand for data and urging from the operators, this has been extended several times and was ongoing as of February 2022.
MTN’s data usage increased substantially in the first six months of 2021, supported by its network expansion. As of the end of June 2021 the company had increased its number of 2G and 3G sites, rolled out 802 4G sites and modernised 1007 existing sites to 4G. As a result, MTN had 2677 4G sites covering 79.9% of the population as of mid-2021, which drove its data traffic growth to 53.2% y-o-y in the first half of the year. These infrastructure improvements form part of the company’s $149m capital expenditure commitment for 2021 to improve its network.
The quality of Ghana’s telecoms infrastructure has improved over the last few years, as reflected in the country’s improving score on the ICT Index, a component of the composite Africa Infrastructure Development Index published by the African Development Bank (AfDB).
Ghana’s score on the ICT Index increased from 21.744 in 2018 to 26.621 in 2020, though its ranking fluctuated over the same period, from 14th place in 2018 to 11th in 2019 before returning to 14th place as of 2020. Ghana’s overall ranking on the Infrastructure Development Index remained unchanged at 12th place between 2018 and 2020. Notably, countries that have performed well in the ICT sector are among the highest-ranked nations on the AfDB’s composite Infrastructure Development Index.
Upgrades and modernisation of mobile networks, and improvements in broadband and fibre access are the major ICT development trends in Africa, according to the AfDB, with several regional submarine and terrestrial cabled installed between 2015 and 2020.
Ghana has five major submarine fibre-optic cables installed: the SAT-3 cable (800-Gbps capacity), connecting Ghana from Portugal and Spain through to South Africa, which connects to Malaysia via the South Africa Fast Cable; the MainOne cable (1.92 Tbps), connecting Ghana, Nigeria, Morocco, the Democratic Republic of the Congo, Portugal and other countries; the ultra-high-capacity West African Cable System (14.5 Tbps), which connects Ghana to Europe via South Africa; the GLO-1 cable (2.5 Tbps), linking to the UK, Spain, Portugal and the US; and the African Coast to Europe Cable (5.12 Tbps).
Inland fibre has been deployed by the four mobile network operators to serve as backbone redundancy to existing microwave transmission infrastructure, or as metro fibre network to the end user.
The first backbone connection was installed by VoltaCom along the southern and middle section of the national power grid. MTN has also deployed an underground optical network across the country to supply backbone connections between the 16 regions. MTN and Vodafone have deployed FTTx metro networks in a combined 38 cities and towns, while AirtelTigo and Glo have laid underground fibre to improve capacity on the backbone route and provide redundancy for microwave links.
The state-initiated 800-km Eastern Corridor Fibre-Optic Backbone project connects 27 towns and municipal centres across the country to the existing cable network. The $38m project was completed in 2015, with funding provided by the Danish International Development Agency.
Notwithstanding improvements to the national ICT network in recent years, fixed network infrastructure is still relatively underdeveloped in Ghana, with fixed broadband penetration below 1% of the population. In April 2021 the Ghana Grid Company (GRIDCo), which operates the national electricity grid, partnered with CS quared, a wholesale open-access broadband infrastructure operator, to lease additional fibre capacity for telecoms use.
GRIDCo uses an optical ground wire system (OGWS) to protect the transmission system from lightning strikes, and the agreement enabled the utility provider to commercialise excess fibre capacity of the OGWS. CS quared is a joint venture owned by Google, Mitsui & Co, Convergence Partners and the World Bank’s International Finance Corporation. It owns and operates more than 2000 km of fibre in Accra, Tema, Kasoa, Kumasi and Takoradi.
Ghana’s start-up ecosystem was ranked second in West Africa and seventh in Africa as a whole on StartupBlink’s 2021 Index, which measures activity levels, quality and the business environment of start-up ecosystems, having moved up four places globally since 2020.
The largest international tech firms have identified value in establishing a presence in Ghana. For example, Twitter has announced plans to establish its African base in the country, where it will seek local talent for roles. Google made a similar announcement, indicating its intention to set up its first African Artificial Intelligence Lab in Accra in 2019.
Ghana’s burgeoning start-up ecosystem attracted $111m in equity funding in 2020, up 102%, according to the Partech “2020 Africa Tech Venture Capital Report”. Financial technology (fintech), insurance technology and health technology together accounted for more than 95% of total funding, with the breakdown relatively balanced across the three categories. Ghana attracted the third-greatest amount of fintech funding in Africa in 2020, for a total of $47m, behind Nigeria and South Africa but ahead of traditional digital heavyweights like Egypt and Kenya. The country’s start-up ecosystem is supported by the Ghana Start-Up Capital Fund, the Ghana-India Kofi Annan Centre of Excellence in ICT, 3 Day Startup and the Meltwater Entrepreneurial School of Technology. The eTransform Ghana project, which was initiated by the Ghanaian government with support from the World Bank’s Digital Economy for Africa Initiative, aims to provide training, mentoring and access to online technologies in order to promote job creation, entrepreneurship, and opportunities in health and education services.
The $212m project supports digital entrepreneurship through three primary tech clusters – the Ghana Tech Lab and the Ghana Innovation Hub, both of which are located in Accra, and the Kumasi Business Incubator in Kumasi. Since its launch in 2019 the project has trained 11,000 young people, incubated 49 start-ups, and supported 1200 businesses with access to workspace, mentoring and training.
“Skills development in the areas of cybersecurity, systems engineering, website design and application development not only makes a candidate more employable, but it also encourages entrepreneurship through tech start-ups in those fields,” Amar Deep Singh Hari, CEO of IPMC, a system integrator, software developer and training provider, told OBG.
The development of the Ghanaian ICT sector is a core objective of the country’s broader industrial development and digitisation plans, and as such the sector continues to benefit from direct support in major national policies. The state-driven push for ICT development, while at the same time maintaining a competitive environment, should support industry players and growth over the long term.
While the sector has shown signs of maturing, there remains significant scope to generate new growth by bringing more Ghanaians online. Expanding fibre infrastructure to accommodate rapidly increasing demand for data and connectivity will be key as the country seeks to fast-track digitalisation and position itself as a West African digital leader.