Port construction in Ghana is expected to maintain its positive long-term outlook, owing to strong demand for port infrastructure improvements and a favourable political risk profile, according to Fitch Solutions.

A snapshot of Ghana’s port infrastructure construction industry exhibits high levels of activity, with a comparatively large number of port projects under construction.

“We maintain a positive long-term outlook for port construction in Ghana, supported by strong demand for port infrastructure improvements and a favourable risk profile.”
Fitch Solutions

Ghana is well-integrated into the global liner shipping network, placing second in the UN Conference on Trade and Development Liner Connectivity Index among sub-Saharan African markets.

As a result, this will boost Ghana’s ability to attract port infrastructure investment, as the country competes with West African markets to establish itself as a regional transshipment hub and gateway to the region’s hinterland.

Furthermore, growing demand for port infrastructure projects in the long run will be buoyed by stable trade growth, Fitch Solutions indicates. Currently, Ghana’s goods imports to grow by 4 per cent per annum between 2023 and 2030. This follows a strong short term growth rebound in 2021 and 2022, given forecast growth rates of 11 per cent and 13 per cent respectively.

“Ghana’s long-term demand for port infrastructure projects will likely be supported by stable trade growth— we currently forecast Ghana’s goods imports (USD) to grow by 4% per annum between 2023 and 2030.”
Fitch Solutions

Meanwhile, taking the impact of the COVID-19 pandemic into perspective, Fitch Solutions estimates Ghana’s goods imports to have contracted by 7.3 per cent in 2020. And Fitch Solutions expects that throughout its forecast period to 2030, Ghana will have the second-largest goods imports in West Africa, trailing Nigeria in the dollar terms.

Ghana’s attractive political risk profile

Port infrastructure opportunities will be supported by a relatively well-stocked project pipeline and steady overall economic growth in Ghana, as Fitch Solutions forecast GDP real growth rates to average 4.9 per cent per year in the medium term.

Also, Ghana has a comparatively attractive industry risk profile, supported by wide access to development funding and a diverse comparative landscape, Fitch Solutions suggests.

Accordingly, Ghana exhibits wide access to development funding, with 109 financing roles in the country’s construction industry, Fitch Solutions asserts. These financing roles are occupied by development finance institutions and export banks.

Contractors active in Ghana’s construction sector have the largest number of distinct nationalities among all countries in sub-Saharan Africa. And among these, Chinese contractors often dominate, rivalled by French companies’ large market shares in many West African countries.

According to Fitch Solutions, Ghana’s comparatively attractive political risk profile will encourage expensive and often complex port infrastructure projects.

“Expensive and often complex port infrastructure projects will benefit from Ghana’s comparatively attractive long-term political risk profile.”
Fitch Solutions

Albeit, in the near term Ghana will see relatively elevated levels of social tension resulting from rising living costs and growing concerns about governance standards and alleged corruption.

Accordingly, this will lead to some small-scale protest activity in the coming months, although a broad political stability will persist, Fitch Solutions indicates.

“We anticipate that vaccine supply challenges will be largely resolved by H2 2021, allowing the government to accelerate its inoculation programme.

“In the long term, we expect that Ghana’s political risk profile will remain relatively favourable, especially in the context of West Africa.”
Fitch Solutions