Doing Businesss in Ghana
Reasons foreigners invest in Ghana is that the economic policy generally welcomes foreign investment, viewing it as a means to promote capital formation, employment, productive capacity, and new technology. Ghana is viewed by many as the ultimate haven in Africa for preservation of capital because of its political and economic stability. The country holds the eighth spot in a ranking by Slate of Africa’s safest countries, thanks to its relatively low level of unemployment and the absence of conflict in recent years. Furthermore, the country ranks sixth among African countries in the Doing Business 2014 report and is one of the countries with the highest progression over the last five years.
Fiscal policy as outlined in the 2015 Budget was aimed at implementing a strong fiscal consolidation programmer to put public debt on a more sustainable path. This was to be achieved by improving revenue mobilization, strictly containing current and capital expenditure within approved limits as well as the implementation of debt management and structural reforms.
The 2015 Budget aimed at reducing the fiscal deficit from 10.2 percent of Gross Domestic Product (GDP) in 2014 to 7.3 percent of GDP in 2015.
Provisional data indicate that 2015 recorded good revenue performance; however, the target for expenditure was missed due to minimal wage bill overrun as well as the clearance of more arrears than anticipated. However, as a result of good revenue performance and containment of expenditure; as well as withdrawal of energy-related subsidies (except funded cross subsidies), the deficit was lower (6.7 percent of GDP) than targeted (7.3 percent of GDP). For the first time in many years, the domestic primary balance in 2015 achieved a surplus equivalent to 0.2 percent of GDP even though it was lower than projected.
Summary of indicators of macro and/or micro performance are highlighted below:
• Economic growth picked up in 2015 to 4.9 percent compared with 4.0 percent in 2014, mainly as a result of increased construction activities (gauged by cement sales), domestic VAT collections and sales by key manufacturing establishments.
• Inflation recorded 17.7 percent at the end of 2015, compared with 17 percent at the end of 2014. The increase in inflation was on account of increase in food inflation from 6.8 percent in 2014 to 8 percent.
• Data from the Bank of Ghana (BOG) showed that the annual growth rate of broad money supply (M2+), increased by 26.1 percent at the end of December 2015, compared with 36.8 percent increase at the end of December 2014
• The cedi depreciated by 26.2 percent during the first half of 2015 but moderated in last quarter as foreign exchange inflows of about US$2.8 billion from the cocoa loan and Eurobond issue provided a strong buffer, amid policy tightness, leading to its appreciation by 14.5 percent in the second half of 2015.
Modest achievements were recorded by almost all the sectors of the local economy, key among them are the following:
• Education: Work commenced on the construction of 23 New Community Day Schools and the two new functioning universities. Work also commenced in each of the 50 schools identified for facilities improvements. Completion of works at these schools was approximately 50 percent on the average at the end of the year.
• Health: massive infrastructure development and retooling was undertaken in major health facilities including University of Ghana Teaching Hospital and the Ridge Hospital which together will deliver about 6,000 hospital beds by 2017 and guarantee access to better improved healthcare for our people;
• Agriculture: Agricultural machinery/equipment worth USD 3.3 million (77 tractors, 49 power tillers, 20 rice threshers, 11 rice reapers and 6 rice mills) imported, assembled and distributed to farmers in six (6) project regions (AR, NR, UER, UWR, VR & GAR). • Water: major investments were made in the sector adding over 77.5 million gallons of water per day to the generation capacity.
• Roads: Significant progress was made in completing many of the “Gang of six’’ roads. The GH¢3 billion Cocoa Road Improvement Project was also launched. Other investments in the sector included the Kwame Nkrumah Interchange, the FufulsoSawla road, the Kasoa interchange and on-going work on the Eastern corridor road.
• Transport: the modernization and expansion of the aviation and maritime infrastructure including the expansion of the Kotoka and Tamale International airports, the 7 aerodrome in Ho, the expansion of the Tema and Takoradi harbors and provision of 116 buses for public road transport.
• Communications: 800 kilometres of optic fibre infrastructure running through 126 communities along the eastern corridor from Ho to Bawku with a link from Yendi to Tamale was deployed.
• Housing: as at the end of the year, about 18,000 housing units were at different stages of completion to help reduce the housing deficit.
• Energy: efforts and various agreements were signed for the generation of 845 MW of power to add to the generation capacity to help address challenges in the energy sector.
M&D Ghana Services Ltd. specializes in corporate governance and broader sustainability issues pertaining to the long term growth and competitiveness of public and private sector corporations in the Republic of Ghana. We invest in long-term relationships so that we do not just work for you, but with you.
M&D Ghana Services Ltd is providing qualified consulting services to assist investors access the variety of opportunities in Ghana, for commencing and developing business in the field of oil and gas, energy, solar and renewable energy, mining, pharmaceuticals, shipping industry, constructions, textiles and agriculture.
M&D Ghana Services Ltd strategy aims at facilitating foreign direct investment in key sectors of the Ghana market through strategic consulting, business development and establishing strategic partnerships with governments, private sector.