Ghana Country Risk Report Q2 2015
Economic growth in Ghana will be buoyant over 2015-2018 thanksto rising oil production and strong investment inflows – the latterencouraged by IMF policy oversight.
Foreign investment inflows will be robust thanks to Ghana's abundantnatural resources and relative political stability.
The current account deficit and fiscal deficit will remain key structuralweaknesses in the economy.
Peaceful protests against power shortages and economic hardshipwill take place in 2015. Ghanaians are wary of the conditions thatmay be attached to IMF support.
Major Forecast Changes
We have revised our forecast for the current account following thedramatic drop in oil prices in the final months of 2014. We now projecta deficit of 11.8% of GDP in 2015, versus a previous 8.4% forecast.
- Executive Summary
- Core Views
- Major Forecast Changes
- Key Risks To Outlook
- Chapter 1: Political Outlook
- SWOT Analysis
- BMI Political Risk Index
- Domestic Politics
- On The Ground: Power Shortages Raising Political Temperature
- Our analyst on the ground in Ghana highlights that frequent, severe power shortages are putting the government under pressure.
- Protests are likely to take place over the next three or four months until emergency power supplies are installed. The protests will be
- relatively peaceful and contained though.
- Table: Politic al Overview
- Long-Term Political Outlook
- Oil: A Critical Test For The Polity
- Ghana's political risk profile is relatively favourable, especially in the context of West Africa. However, oil revenues require careful
- management, presenting a formidable test for the government over the coming decade.
- Chapter 2: Economic Outlook
- SWOT Analysis
- BMI Economic Risk Index
- Economic Activity
- Growth Will Pick Up Despite Fiscal Challenges
- Economic growth in Ghana will accelerate, hitting 5.8% in 2015 and 8.0% in 2016 thanks to rising oil and gas production and robust
- investment inflows. Our forecasts are predicated on two key assumptions: a deal is reached with the IMF, and lower oil prices have no
- meaningful impact on domestic production of oil and gas.
- Table: Eco nomic Acti vit y
- Balance Of Payments
- Past The Worst
- Ghana's current account deficit will increase significantly in 2015, to 11.8% of GDP, from an estimated 9.2% of GDP in 2014, owing to
- reduced commodity export earnings. However, investment inflows will grow as confidence improves, meaning that the overall balance of
- payments position will strengthen.
- Table: Current Accou nt
- Exchange Rate Policy
- GHS: The Reprieve Is Over, Depreciation To Resume
- The Ghanaian cedi will resume its long-standing depreciatory trend, owing to a wide current account deficit. Although foreign investment
- Table: Exch ange Rate
- Table: BMI Currency Forecast
- Banking Sector Outlook
- Overheating Banking Sector To Cool Off
- Growth of banking sector assets, which has been robust despite economic malaise in Ghana, will slow over the course of 2015 as
- higher interest rates, increasing non-performing loans and a loan-to-deposit ratio approaching unsustainable territory weigh on loan
- Chapter 3: 10-Year Forecast
- The Ghanaian Economy To 2024
- Oil To Boost Growth Over The Long Term
- We hold a positive long-term outlook on Ghana, forecasting that annual real GDP growth will average more than 6.0% over the coming
- 10 years. The ramping up of domestic oil production will provide significant impetus to the economy, allowing the mitigation of fiscal and
- current account drags.
- Table: Lo ng-Term Macroeco nomic Forecasts
- Chapter 4: Operational Risk
- SWOT Analysis
- Operational Risk Index
- Operational Risk
- TABLE : Operatio nal Ris k
- Availability Of Labour
- Table: Sub -Saharan Af ric a - Availabi lit y Of Labou r Ris k
- Table: Top 10 Sou rce Cou ntries fo r Mig rant Wo rkers
- Crime Risk
- Table: Crim e Statistics
- Chapter 5: BMI Global Assumptions
- Global Outlook
- Weaker EMs To Weigh On Growth
- Table: Glob al Assumptio ns
- Table: Develop ed States, Real GDP GrowtH, %
- Table: BMI VER SUS BLOOMBER G CONSEN SUS REAL GDP GROWTH FORE CASTS, %
- Table: Em ergi ng Markets , Real GDP Growth , %