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Future of the Ghanaian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Future of the Ghanaian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Ghanaian defense budget, valued at about US$188 Million in 2017, registered a CAGR of around -9% during the historic period. The decrease in budget during the historic period is primarily due to an about -50% decline in exchange rate. However, in local currency terms, it reflected a steady growth. The country’s military is currently faced with a huge challenge to prevent the spread of pro-Islamic insurgent group Boko Haram within the country.

Ghanaian homeland security expenditure decreased from over US$400 Million in 2013 to about US$360 Million in 2017, registering a CAGR of around -2.8% during the historic period. Threats from the increasing influence of terrorist groups such as Al-Qaeda in the Islamic Maghreb (AQIM), and Boko Haram, coupled with increased drug trafficking are expected to drive focus on homeland security expenditure over the forecast period.

Majority of the country’s imports consist of aircrafts and armored vehicles. In September 2015, Ghana’s Air Force took delivery of four units of Harbin Z-9EH utility helicopters from China and in December 2015, it decided to expand its fleet of Super Tucano A-29 turboprop trainer and multirole light attack aircraft by adding four more units.

Country is expected to allocate a relatively low of about US$230 Million to defense expenditure in 2018, which acts as a barrier to foreign operators aiming to supply defense equipment to Ghana’s Ministry of Defense (MoD). Corruption, which may result in the unfair allocation of contracts, can also limit market entry.

The report “Future of the Ghanaian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Ghanaian defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -
- The Ghanaian defense industry market size and drivers: Detailed analysis of the Ghana defense industry during 2018-2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
- Budget allocation and key challenges: Insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of the Ghanaian defense industry: Analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry.
- Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years.
- Market opportunities: Details of the top five defense investment opportunities over the next 10 years.
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Ghanaian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Companies mentioned in this report: Defence Industrial Holding Company Limited (DIHOC)

Scope

- The Ghanaian defense budget stood at GHS821.8 million in 2017 and registered a CAGR of 9.31% during 2013-2017. During 2013-2017, an average of 21.9% of the country’s total defense budget was allocated to capital expenditure, while an average of 78.1% was reserved for revenue expenditure. Capital expenditure touched 14.8% of the defense budget in 2017, and is projected to decrease to an average of 14% during the forecast period.
- This is primarily due to the country’s plans to replace its obsolete military equipment and procure Mi-35 attack helicopters, and four more Super Tucanos. The remaining defense budget is allocated to revenue expenditure, which includes personnel salaries, and the operation and maintenance costs of equipment and defense facilities.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Ghanaian defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Ghanaian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About Strategic Defence Intelligence
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment & Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Ghanaian defense expenditure is projected to grow at a CAGR of 11.96% during the forecast period
3.2.2. Insurgency, piracy, oil smuggling, and peacekeeping operations are expected to drive defense expenditure
3.2.3. Defense budget as a percentage of GDP expected to average 0.5% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Allocation for capital expenditure expected to average at 14% over the forecast period
3.3.2. Capital expenditure budget expected to increase over the forecast period
3.3.3. Per-capita defense expenditure expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security budget projected to increase during the forecast period
3.4.2. The threat from Boko Haram, drug trafficking, cybercrime, and money laundering to drive the homeland security market
3.4.3. Ghana falls under the ‘some risk category’ by terrorist attack
3.4.4. Ghana has rank of 106 in terrorism index
3.4.5. Ghana has a terrorism index score of 0.3
3.5. Benchmarking with Key Global Markets
3.5.1. The country’s defense budget is expected to increase during the forecast period
3.5.2. Ghanaian military expenditure is limited compared to countries with the largest defense expenditure
3.5.3. The country allocates a lower percentage of GDP to defense
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Combat Aircraft Engines
3.6.2. Attack Helicopters
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Limited capability of the domestic defense market drives imports
4.1.2. China, Russia, Germany and Spain account for most of the country’s defense imports
4.1.3. Aircraft, Armored vehicles and Ships are the largest imported military hardware
4.2. Export Market Dynamics
4.2.1. Ghana does not export arms due to its underdeveloped domestic arms industry
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low to medium
5.1.2. Bargaining power of buyer: medium to high
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: low
5.1.5. Threat of substitution: low
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Budgeting Process
6.1.2. Procurement Policy and Process
6.1.3. Ghana does not disclose any offset obligations imposed by the country
6.1.4. FDI in the defense sector prohibited by the Ghanaian government
6.2. Market Entry Route
6.2.1. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. Corruption acts as an obstacle for market entry
6.3.2. Small defense budget does not attract suppliers
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. Defence Industrial Holding Company Limited (DIHOC): overview
7.2.2. Defence Industrial Holding Company Limited (DIHOC): products and services
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. Gross Domestic Product Per Capita (US$)
8.1.2. Gross Domestic Product, current US$
8.1.3. Export of Goods & Services
8.1.4. Imports of Goods & Services
8.1.5. Local Currency Unit per US$
8.1.6. Market capitalization of listed companies (US$ Billion)
8.1.7. Market capitalization of listed companies (% GDP)
8.1.8. Government cash surplus/deficit as % GDP (LCU)
8.1.9. Goods Exports as a % of GDP
8.1.10. Goods Imports as a % of GDP
8.1.11. Services Imports as a % of GDP
8.1.12. Services Exports as a % of GDP
8.1.13. Net Foreign Direct Investment
8.1.14. Net FDI as a percentage of GDP
8.1.15. Mining, Manufacturing, Utilities Output (LCU Billion)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Ghana Ground Forces Strength
Table 2: Ghana Air Force Strength
Table 3: Ghana Navy Strength
Table 4: Ghana - Ongoing Development and Procurement Programs
Table 5: Ghana - Future Procurement Programs
Table 6: Ghanaian Defense Expenditure (GHS Million & US$ Million), 2013-2022
Table 7: Ghanaian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: Ghanaian Defense Budget Split between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Ghanaian Defense Capital Expenditure (GHS Million & US$ Million), 2013-2022
Table 10: Ghanaian Per-Capita Defense Expenditure (US$), 2013-2022
Table 11: Ghanaian Homeland Security Expenditure (GHS Billion & US$ Million), 2013-2022
Table 12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 14: Ghana Budgeting Process
Table 15: Defence Industries Corporation of Ghana - Main Products
List of Figures
Figure 1: Ghanaian Defense Expenditure (in GHS Million), 2013-2022
Figure 2: Ghanaian Defense Expenditure (in US$ Million), 2013-2022
Figure 3: Ghanaian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Figure 4: Ghanaian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Ghanaian Capital Budget Allocation (GHS Million), 2013-2022
Figure 6: Ghanaian Capital Budget Allocation (US$ Million), 2013-2022
Figure 7:Ghanaian Per-Capita Defense Expenditure (US$), 2013-2022
Figure 8: Ghanaian Homeland Security Budget (GHS Billion), 2013-2022
Figure 9: Ghanaian Homeland Security Budget (US$ Million), 2013-2022
Figure 10: Terrorism Heat Map, 2017
Figure 11: Terrorism Index, 2017
Figure 12: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017
Figure 15: Ghanaian Defense Import Trend, 2012-2016 (TIV values)
Figure 16: Ghanaian Defense Imports by Country (US$ Million), 2012-2016
Figure 17: Ghanaian Defense Imports by Weapon Category (%), 2012-2016
Figure 18: Industry Dynamics - Porter’s Five Forces Analysis
Figure 19: Ghana’s GDP per capita (US$), 2015-2025
Figure 20: Ghana’s Gross Domestic Product (current US$ Billion), 2015-2025
Figure 21: Ghana’s Exports of goods and services (LCU Billion), 2005-2014
Figure 22: Ghana’s Imports of goods and services (LCU Billion), 2005-2014
Figure 23: Ghana’s LCU per US$, 2015-2024
Figure 24: Ghana’s Market capitalization of listed companies (US$ Billion), 2005-2012
Figure 25: Ghana’s Market capitalization of listed companies (% GDP), 2005-2012
Figure 26: Ghanaian Government cash surplus/deficit as a % of GDP (LCU), 2005-2011
Figure 27: Ghana’s Goods Exports as a % of GDP, 2005-2013
Figure 28: Ghana’s Goods Imports as a % of GDP, 2005-2013
Figure 29: Ghana’s Services Imports as a % of GDP, 2005-2013
Figure 30: Ghana’s Services Exports as a % of GDP, 2005-2013
Figure 31: Ghana’s Net Foreign Direct Investment (BoP, current US$ Billion), 2005-2013
Figure 32: Ghana’s Net FDI as a percentage of GDP, 2005-2013
Figure 33: Ghana’s Mining, Manufacturing, Utilities Output (LCU Billion) 2005-2014

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