Fitch Solutions' Operational Risk Index ranked Ghana #1 out of 16 West African nations.
Ghana had a score of 50.9 out of 100 in Fitch's trade and investment study. Ghana exceeded the West African average of 36.4 and is currently ranked 2nd regionally and 88th internationally out of 201 markets.
According to the surveys, Ghana surpassed the West African average of 33.3 and is ranked first in the region and 90th out of 201 markets globally, with a Crime and Security Risk score of 51 out of 100.
The whole report may be found here:
Lower public investment would stifle Ghana's construction industry's expansion.
Aspects to Consider
• We expect Ghana's construction industry to rise by 4.1 percent year over year in 2022, down from 5.7 percent year over year in 2021. Higher oil and gold prices are unlikely to boost Ghana's infrastructure development business since we expect greater state income toward debt payments and Ghana's hefty public salary bill rather than capital projects.
• We expect a significant depreciation of the cedi against the US dollar in 2022 to make private sector investors less willing to invest in Ghana's infrastructure and construction sector in the near term, offsetting the negative impact of low public infrastructure spending on the market's performance.
We expect Ghana's construction sector will rise by 4.1 percent year over year in 2022, down from 5.7 percent year over year in 2021. Higher oil and gold prices are unlikely to benefit Ghana's infrastructure construction industry. We expect increased public revenues to be channeled towards debt servicing and Ghana's high public wage bill rather than capital projects, as Ghana's access to international capital markets will be limited in the near term.
As a result, we expect government capital spending will decline from 3.7 percent y-o-y in 2021 to 3.3 percent y-o-y in 2022 and 2.9 percent y-o-y in 2023.
While this puts capital expenditure levels above those in 2018-2020, when Ghana's construction industry growth averaged -0.1% per year, it still falls short of the comparatively high annual average levels of 4% of GDP between 2010 and 2017, when the construction industry grew at an annual rate of 8.1 percent per year.
We expect Ghana's construction industry to develop somewhat faster in 2023, while the Cedi's depreciation against the US dollar will moderate to 4.6 percent y-o-y.
In general, this reduces foreign investors' income risks, while reduced inflation boosts demand for residential and non-residential buildings.
Ghana's access to foreign financial markets, on the other hand, will remain limited, putting a damper on public infrastructure investment and the construction industry's expansion.