Ghana’s Economy Enters Prime Time of Growth

The economy of Ghana is in its prime time of growth and investor appetite in key areas such as the oil and gas sector, banking and finance, manufacturing, agriculture and commodities, infrastructure and utilities, among others, are continually on the rise.

That is not surprising given that Ghana, a country home to some 25 million people, has over the past two decades, established itself as a beacon of democracy in a region known for constant political and ethnic upheavals. It has since 1992, when it retuned from military rule to democracy, witnessed two successful and peaceful changeover in governments from one political party to another. 

Given that business confidence and investor appetite is, in most cases, dependent on the socio-political environment, these developments together with Ghana’s status as a key exporter of minerals, premium cocoa and now oil, has helped to put it on a path of sustained growth over the past few years. In 2010 for instance, its gross domestic product (GDP) grew by eight per cent, year-on-year, before rising to a record-high of 14.4 per cent in 2011, on the back of its new status as an oil producer. Ghana discovered oil in commercial quantities in 2007 and started production in late 2010.

Although it was unable to continue with the 2011 growth momentum in 2012, partly as a result of a general election in that year which saw more resources and attention being diverted to campaigns rather than channeled into development, its growth rate of eight per cent, as reported by the country’s national statistics body, the Ghana Statistical Service, was enviable and compared favourably with its peers in the sub-region and the continent at large.

Additionally, the country is continually on the good books of the international business community and investors in particular, and that has reflected in the investment inflows that the country records on annual basis. In February this year, the Ghana Investment Promotion Council (GIPC) announced that FDIs amounted to US$5.63 billion in 2012 and were realised from some 399 projects registered in agriculture, energy, construction, among other sectors of the economy. Last year’s FDIs inflows and their value were however lower than the US$7.68 billion worth of FDIs registered in 2011.

Also, the Ghanaian economy continues to receive positive ratings from reputable international institutions and individuals. It was recently ranked the fourth top investment destination in sub-Saharan Africa in the 2012/2013 edition of the World Economic Forum’s Global Competitiveness Index. The index also ranked Ghana as the third among the top five recipients of foreign direct investments (FDIs) in Africa. 

But in the midst of these positive accolades come some domestic challenges that equally present business opportunities for investors wishing to tap into the economies of stable yet developing countries. Continue reading…