Ghana has been ranked sixth best place in Africa for investors in the 2020 RMB Investment Attractiveness rankings. The country edged closer to a coveted top five position this year, rising three places in the rankings.
According to the report, the country’s growth outlook is strong and concentrated around the oil and gas sector.
“Non-oil growth is forecast to pick up again, supported by pro-business reforms and a steady improvement in power supply. Political stability will remain underpinned by Ghana’s strong democratic credentials.
The report attributed Ghana’s performance to its strong growth outlook mainly concentrated around oil and gas.
It indicated that even though the country’s growth outlook was concentrated around oil and gas, it was projected that non-oil growth would pick up again, supported by pro-business reforms and a steady improvement in power supply.
Ghana’s economy last year grew at 7.1 per cent, against the 8.8 per cent projected by the International Monetary Fund (IMF).
The World Bank projects Ghana’s economic growth rate for 2020 at 6.8 per cent, making the third fastest in Africa, this is against the 7.5 forecast by the International IMF. The report further said political stability would remain underpinned by Ghana’s strong democratic credentials.
“Regardless of a recent deterioration in its operating environment rankings, Ghana remains one of the easier business environments in Africa,” the report said.
On socio-political risks Ghana moved from nine in 2018 to six in 2019, making the country a safe haven for business and investment.
With regards to prioritizing economic activity, which was focused on balancing the quantitative macroeconomic view with the practicalities of doing business, improved, moving from seven to six, while in terms of operating environment Ghana dropped from seven to six.
However, the report said Ghana’s large public debt burden (and public arrears in the local power sector), required considerable fiscal consolidation to correct.
“The country’s commodity dependency is increasing, with oil, gold and cocoa being the main exports, which leaves Ghana heavily exposed to international price trends,” the report said.
Turing the focus on West Africa, the report said although growing faster than Southern Africa, West Africa’s growth trails the average for Africa as a whole.
It said Nigeria, Africa’s biggest economy, was the main culprit for dragging the region’s growth prospects down, mainly due to the drop in oil prices and the lack of industrialization.