Ghana maintained position as the fifth most attractive automotive sales environment amid a favourable political risk outlook indicating policy certainty.

Ghana managed to outperform its regional peers under the short- and long-term political risk scores in the Risk/Reward Indicator (RRI), scoring a respective 51.2 and 70.2 under these indicators.

Ghana’s underdeveloped road infrastructure remains a deterrent for potential as the country scores 16.9 under the ‘quality and extent of transport network’ indicator, underperforming the SSA region’s average score of 21.6 under the same indicator.

However, progress is being made with regards to upgrading and developing the country’s road infrastructure with the recent commissioning of a four-tier interchange in Accra underscoring the progress being made to upgrade the country’s roads.

Ghana’s low levels of vehicle ownership rates highlighted by a score of 11.3 under the vehicle ownership per 1,000 inhabitants indicator signals further room for vehicle sales growth going forward as rising incomes lead to first-time buyers entering the market for vehicles.

Furthermore, an age limit on imported vehicles permitted into the country will develop a local new vehicle sales market going forward as the flow of used vehicle imports slows to the benefit of newer vehicles.

Other Developments in SSA

The SSA region continues to underperform all other regions in the Autos Sales RRI globally, with a regional average score of 30.5 out of a possible 100.

Although the SSA region remains a relatively unattractive region, its long-term growth potential, especially for internal combustion engine vehicle sales, proves attractive for automakers despite the high degree of risks faced.

That said, the growth will come from a low base reflected in the region’s score of 26.1 out of a possible 100 under the ‘Vehicle Sales Volume’ indicator and 76.9 under the ‘Vehicle Sales Growth’ indicator.

Fitch highlights that markets in the SSA region face elevated risks while many also offer limited rewards for automakers or vehicle importers. Breaking this trend is South Africa, Mauritius and Botswana which offer investors decent reward potential along with more manageable risk profiles.

Specifically, Fitch noted that South Africa and Mauritius are the only markets that have Autos Sales RRI that outperform the global average of 50.0 out of a possible 100 with overall scores of 50.7 and 50.1 respectively.

“We believe that the demand for vehicles remains strong in the SSA region, however, the rising inflation and limited supply of new and used vehicles will constrict vehicle sales growth in 2022. “
Fitch Solutions

Furthermore, while energy and metal producers will benefit from higher fiscal revenues, costlier food and fuel subsidies will counteract the beneficial impact of increased government revenue and increased investment due to the high oil prices.

“That said, we note that vehicle sales markets in oil and gas producing countries boasts some upside risk as it will drive up government income, employment and additional investment. The likes of Nigeria, Angola, and Cameroon could further outperform the wider region.”
Fitch Solutions