Rand Merchant Bank (RMB), corporate and investment banking arm of FirstRand Bank Ltd, in its ‘Where to Invest in Africa 2021’, ranks Ghana as the most attractive investment destination in the West African Sub-region.

With this strong performance, Ghana occupied the sixth place this year across the continent, behind Egypt, Morocco, South Africa, Rwanda, and Botswana in that order.

RMB highlighted that Ghana’s performance last year despite the pandemic was better than most of its peers in the Sub-Saharan African region (SSA).

“Ghana entered the current crisis on a relatively stronger footing than its African peers. The economy managed to avoid a recession in 2020 and registered growth of 0.4% — outperforming the SSA economies, which contracted by 3.2% on average. Based on the rankings, Ghana has further outperformed other west African countries in terms of its investment-attractiveness, emerging as the top destination, followed by Côte d’Ivoire, Senegal and Nigeria”.
RMB

Structural transformation

According to RMB, Ghana’s economy has undergone significant structural changes over the past years which holds potential growth prospects for the economy in the near future. It cited the agriculture sector as one of the main growth-enhancing sectors in the medium-term.

“Structurally, Ghana’s economy has seen major shifts over the past few years, positioning it for significant growth going forward. This is supported not only by primary-sector industries like oil and gold but accelerated development in the tertiary sector. We see the construction, agriculture, and services sector as the main catalysts for strong 4.2% average growth between 2022 and 2023”.
RMB

RMB underscored that this year, the economy has shown a steady recovery, with the GDP expanding by 3.9% in Q2 2021, supported by performance in both the secondary and tertiary industries. The RMB expects major export commodities to pick-up strongly in the next few years.

“Over the next few years, oil production output will pick up in the near term, supported by higher oil prices that should encourage further oil exploration in Ghana. There are similar expectations for gold production, which is further supported by government efforts to curb illegal mining activity, thereby promoting the formal sector”.
RMB

Focus of this year’s report

According to the author, RMB Africa Economist Daniel Kavishe, this year’s report assesses the extent of the pandemic’s impact by sketching the landscape of the continent’s pre-COVID-19. The report, then painted a picture of the continent’s actual and potential outcomes through and post pandemic.

“We created a new set of rankings that incorporated some of the unavoidable COVID-19-induced challenges, of which the operating environment score was one.”
Daniel Kavishe

The report also included an appraisal of governments’ ability to support their various economies during such periods. As such, a fiscal score was also part of the methodology. This, Kavishe said, was essential because “fiscal scores are important indicators of how governments respond to COVID-19.”

Need to consolidate fiscal spending

For Ghana, the next few years will centre on government’s ability to consolidate fiscal spending over the next few years, undoubtedly necessary to alleviate the country’s debt burden, the report stated.

Overall, the report further explored key themes emanating from Africa’s developmental aspirations. Of these, Kavishe contended that “three are central to fighting the pandemic and resuscitating economic conditions. They are government intervention, a focus on our triple-threat sectors, and healthcare”.