Real GDP growth in Ghana will accelerate in 2016 and 2017 as the economy recovers from the economic morass it has been in over the past two years. Increasing oil production, improving electricity generation and diminishing deficits will be the root causes of this.
Another hike to Ghana's key policy rate on September 14, a hawkish communique and still-high inflation augur for further monetary tightening in Ghana, and we now expect that there will be an additional 100 basis points (bps) hike to the policy rate before year-end - implying 26.00%, the highest rate since 2003. This is indicative of the macroeconomic troubles Ghana is undergoing, and the authorities' determination to bring inflation under control at whatever cost.
Ghana's current account deficit will begin to diminish in 2016, despite ongoing price weakness for the country's key commodity exports. A ramp-up in oil exports and import-limiting currency weakness will offset ongoing falls in prices.
There will be some increase in spending by Ghana's NDC in the run-up to the 2016 elections, but not to a level that should concern investors. A weak political opposition and the high costs involved in failing the IMF programme mean that a massive increase is unlikely.
Ghana has issued its third eurobond at a yield of 10.75%. This will help support the currency, preventing what would have been a likely sell-off of the cedi had the authorities delayed the issuance any further, and help cover the budget and roll over short-term debt. However, while the eurobond is cheaper than short-term borrowing, the debt will be far more costly to Ghana than previous issuances; its 2026 bond issued last year launched at a rate of 8.2%.
Key Risks To Outlook:
If the government fails to abide by the IMF's conditionality following the deal finalised in early 2015, investor sentiment will sour severely.
The Ghanaian cedi remains vulnerable amid the sizeable current account deficit and could depreciate...
The Ghana Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Ghana. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Ghana's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
- Forecast the pace and stability of Ghana's economic and industry growth through end-2019.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Ghana's country risks against regional peers using BMI's country comparative Risk Index system.
- Evaluate external threats to doing business in Ghana, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for Ghana through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Ghana Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector obligations).
- Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for Ghana and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Ghana, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in Ghana over the next 5-years?
BMI's Ghana country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Ghana Market - Political Strengths, Weaknesses, Opportunities and Threats facing Ghana.
- Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Ghana's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Long-Term Political Outlook BMI examines the structural risks to the stability of Ghana’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.
- Benchmark Ghana's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
What are the current operational risks and difficulties associated with doing business in Ghana?
The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Ghana against its neighbours.
Operational Risk Contents
The chapter provides a summary of the main threats in the country, within:
- Labour Market Risk (Education; Availability of Labour; and Labour Costs)
- Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
- Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
- Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).
The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:
- Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
- Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
- Evaluate Ghana’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.