Ghana’s economy entered a full-blown macroeconomic crisis in 2022 on the back of pre-existing imbalances and external shocks. Large financing needs and tightening financing conditions exacerbated debt sustainability concerns, shutting-off Ghana from the international market. To help restore macroeconomic stability, Ghana has secured a three-year IMF Extended Credit Facility (ECF) program of about $3 billion and has embarked on a comprehensive debt restructuring. The authorities have committed to a frontloaded fiscal consolidation while pursuing a tighter monetary policy, complemented by structural reforms in the areas of tax policy, revenue administration, and public financial management, as well as steps to address weaknesses in the energy and cocoa sectors. Ghana has also embarked on an ambitious reform program to improve the investment climate for both local and international investors; notably to improve the business environment, attract FDI, and improve export competitiveness and Ghana’s integration into global value chains.
Key Indicators |
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| Population in millions, 2022 | 32.1 | |
| GDP per Capita, U.S. dollars, 2022 | 2252 | |
| GDP Growth, percent, 2022 | 3.1 | |
| Inflation, CPI average, change in percent, 2022 | 31.9 | |
| General Government Debt, percent of GDP, 2022 | 92.4 | |
| Source: WEO, October 2023 | ||
NEW: Creating Markets in Ghana – Country Private Sector Diagnostic
Creating Markets in Ghana – A new joint IFC and World Bank study has identified agribusiness, ICT and education services in Ghana as high growth potential sectors. The Country Private Sector Diagnostics (CPSD) identify sectors where private sector solutions can create or expand markets, and make substantial contributions to development impact. To read the diagnostic, click here.
Agriculture & Agribusiness
Background
- The Agriculture sector remains the bedrock of sustainable development, contributing over a quarter percent of GDP and providing jobs and livelihood to over half the population with approximately 300,000 hectares of irrigable land accessible.
Relevant institutional/policy changes and challenges
- The strategy is to pursue value-addition, aimed at rapidly ramping up agro-processing and the development of new and stable markets
Specific investment opportunities
- Agriculture Mechanization
- Value chain opportunities - e.g. rice, tomatoes, poultry, sugar, ethanol
- Agro-processing - cashew, cotton, soya, rice, oil palm, coconut
- “1 Village 1 Dam” project
- “1 District 1 Factory”
Petro-Chemical Industries
Background
- Ghana has since 1962, been contemplating the establishment of an integrated aluminium industry, using its natural resources in bauxite, hydro, gas and its existing smelter (Valco).
- The current estimate of deposit at Kyebi is 180 million metric tonnes and Nyinahin is 792 million metric tonnes.
- Petro-Chemical industry to complement oil & gas.
Relevant institutional/policy changes and challenges
- A number of feasibility studies have been conducted in the area
Specific investment opportunities
- Development of the bauxite mines which are located in Awaso, Nyinahin, and Kyebi
- Establishment of a refinery at one of the bauxite site,
- Construction of a dedicated power plant to provide reliable and affordable source of power for the smelter;
- Development of a rail way infrastructure between the mines and Tema; and
- Establishment of industrial parks dedicated to the manufacturing of aluminium related products and petro-chemicals
Energy
Background
- The government’s energy policy is embodied in the Strategic National Energy Plan 2006-2020. The policy aims to develop a sound energy market that would provide sufficient, viable and efficient energy services for Ghana’s economic development
- Total installed capacity of over 3,800MW, with electricity accessibility above 80%.
Relevant institutional/policy changes and challenges
- Unbundled energy sector (separation of generation, transmission and distribution). This has led to viable Independent Power Producers (IPPs) in the market
- Established active institutional, legal and regulatory framework;
- Ongoing restructuring of the energy sector debt;
- Focus on renewable energy and energy efficiency; and
- Introduction of concessions in electricity distribution sector to enhance efficiency and quality of service.
Specific investment opportunities
- Increase penetration of renewable energy in the energy mix, to achieve at least 10% of the generation mix by 2020;
- Manufacturing of prepaid meters, cables and PV solar panels;
- Potential hub for the manufacturing of equipment for the transmission and distribution of electricity cables, and transformers for the region
- Development of mini-grid systems in off-grid and island communities for lighting, irrigation and other activities.
Financial
Background
- Ghana’s financial system is skewed towards the banking sector with insurance and pension at nascent stage.
- Although domestic capital market is promising, it is thin with corporate bonds virtually non-existent.
- Penetration remains low in the insurance sector. Pension funds industry has been growing rapidly on the back of the recent reforms but with the bulk of the assets in government securities and term deposits.
Relevant institutional/policy changes and challenges
- The passage of the new Securities Industry Act, 2016 (Act 929) has provided for a stronger regulatory framework that supports the facilitation of securities market development.
- The launch of the Ghana Alternative Market (GAX) provides a platform for companies with growth prospects to raise long-term capital.
- The Venture Capital Trust Fund (VCTF) has invested in 50 Ghanaian SMEs and has promoted indigenous local VC Fund Managers to take equity positions in Ghanaian SMEs.
- Need to promote long-term finance and diversify the financial sector from traditional reliance on credit financing and also to address deficiencies in the regulatory and supervisory framework.
Specific investment opportunities
- Ghana Venture Capital Trust Fund to create instruments and leverage foreign private capital for long term financing
- Ghana Infrastructure Fund to provide a vehicle for infrastructure finance including railways, airports and commercially viable roads, etc.
- Investment funds to support industrial expansion, and the promotion of scientific research to support industrial competitiveness
- Improve financial infrastructure by building an electronic database / portal for the financial sector (including Securities and Exchange Commission, National Pensions Regulatory Authority, National Insurance Commission, Bank of Ghana, etc.)
- Development of domestic capital markets, and strengthening the supervisory capacity of regulators in the insurance, pensions and capital market
See Full Prospectus
