Market Research Report
Construction in Ghana - Key Trends and Opportunities (H1 2021)
|Published by||GlobalData||Product code||1001846|
|Published||Content info||16 Pages
Delivery time: 1-2 business days
|Construction in Ghana - Key Trends and Opportunities (H1 2021)|
|Published: April 9, 2021||Content info: 16 Pages||
Ghana's construction industry expanded marginally by 0.6% in real terms in 2020, following a contraction by 4.4% in 2019, with output value increasing from US$11.18 billion in 2019 to US$11.24 billion.
GlobalData expects Ghana's construction industry to grow by 1.1% in 2021 and register an annual average growth rate of 3.9% between 2022 and 2025. In comparison with other economies in West Africa, Ghana's response to the COVID-19 pandemic was much swifter, enacting earlier lockdown measures and kick-starting its 'Ghana Beyond Aid' initiative. The initiative aims to diversify Ghana's manufacturing base and overhaul its taxation structure, increasing the resilience of the economy. The government held a Eurobond road show in January 2020 to raise up to US$3 billion, which provided a buffer to support the Ghanaian Cedi. The funds raised from the issuance are intended to finance infrastructure projects and help manage Ghana's rising debt stock.
Given that Ghana is an import-driven economy, COVID-19 is expected to have negatively impacted the country's international trade and reserves. As a result, it's expected that the economy will suffer due to a reduction in government revenue, affecting its ability to spend on development projects. The downturn in the hydrocarbons sector will have spillover effects on the wider economy, negatively affecting infrastructure investment and related services. Some partial offset could be provided by an increase in gold production, as large-scale mining companies take advantage of the recent surge in global prices. The unplanned increase in expenditure, specifically in the health sector, resulted in a rise in public debt, with the deficit increasing to 6.6% of revised GDP, higher than the de facto fiscal rule of 5% set by the Fiscal Responsibility Law.
The construction industry's medium-term outlook looks positive on the back of a global recovery, supported by infrastructure investment and industrialization projects under the 'Ghana Beyond Aid' initiative. The 'One District, One Factory' scheme will provide further support; according to the mid-year budget review for 2020, the scheme has 232 projects at various stages of construction, 76 of which are completed and operational. A key government priority over the medium term is the further development of the oil and gas sector. The authorities plan to revise laws on oil and gas licenses in an effort to spur production and investment. However, oil majors have drastically reduced capital expenditure and costs amid low global oil prices, so development is likely to be delayed in 2020-21.
Nonetheless, Ghana's large oil reserves are likely to attract further investment once oil prices recover. Ghana also has a relatively sophisticated automotive industry and exports to other African economies are likely to remain strong, aiding the expansion of the industrial sector. The declaration of the public private partnerships (PPP) Bill, the current version of which was first drafted in 2016, will be key in driving development in the construction industry. The PPP Bill seeks to establish an all-inclusive legal framework for the assessment, implementation and regulation of PPP arrangements and projects between public institutions and agencies and private bodies for the provision of public infrastructure and services.
This report provides detailed market analysis, information, and insights into Ghana's construction industry, including -
This report provides a comprehensive analysis of the construction industry in Ghana. It provides -