Ghana has the lowest risks to trade and investment in West Africa – Fitch Solutions
Ghana has been ranked as the country with the lowest risks to trade and investment in the West African sub-region.
Per Fitch Solutions Operational Risk Index, Ghana’s 50.9 score in trade and investment Risks, beats the West African average of 36.4.
On the African Continent, Ghana ranks 2nd in trade and investment risks. Globally, Ghana ranks 88th out of the 201 markets surveyed.
Ghana was once again ranked first both within the sub-region and the entire Continent with a 51 score in the crime and security risk index.
Ghana, according to Fitch Solutions once again outperformed the West African average of 33.3. Globally, Ghana ranked 90th out of 201 markets.
Fitch Solutions Operational Risk Index quantitatively compares the challenges of operating in 201 countries and territories globally.
The index scores each country or territory on a scale of 0-100, with 100 being the lowest risk.
Each country or territory has a headline Operational Risk Index score, which is made up of four categories of analysis, each further broken down into three sub-sectors.
The individual categories and sub-categories are also scored out of 100, with 100 the best. The index focuses on four main risk areas: labour market, trade and investment, logistics, and crime and security.
The ranking by Fitch Solutions is contained in a report which assessed the country’s construction industry for 2022.
According to Fitch Solutions, growth in the construction industry on a year-on-year basis is expected to slow by 1.6% between last year (2021) and this year (2022).
The projected growth in the country’s construction industry for this year is pegged at 4.1%, some 1.6% less the 5.7% growth rate recorded in the industry for 2021.
The reduction in the projected growth rate, Fitch Solutions, attributes to the diversion of some part of government revenue from capital projects to debt servicing.
“We forecast Ghana’s construction industry to grow by 4.1% y-o-y in 2022, a slowdown compared to the estimated growth of 5.7% y-o-y in 2021. Unlike in other markets, Ghana’s infrastructure construction industry is unlikely to benefit from higher oil and gold prices, as we expect that increased public revenues will be channelled towards debt servicing and Ghana’s high public wage bill rather than capital projects, as Ghana’s access to international capital markets will be constrained in the near term,” the research agency said.
In view of the government diverting some of its revenues from going into capital projects (infrastructure), Fitch Solutions forecasts capital expenditure to shrink to 3.3% of GDP in 2022 down from 3.7% in 2021.
In 2023, capital expenditure is further expected to shrink to 2.9% of GDP.
