2013-03-13 17:33:19 - Recently published research from Business Monitor International, "Ghana Business Forecast Report Q2 2013", is now available at Fast Market Research

Core Views

The Ghanaian economy will enjoy strong economic growth over the medium term, propelled by the nascent Oil & Gas sector.

Ghana's abundant natural resources, fast growth trajectory and relative political stability augur for strong foreign investment inflows.

The current account deficit and fiscal deficits will remain key structural weaknesses in the economy.

Ghana's reputation for political stability remains intact following the December 2012 elections and the nation is widely regarded as a safe place to do business.

Major Forecast Changes

Following the revelation that the budget deficit swelled to more than 12.2% of GDP in 2012, we are now forecasting larger budget deficits than previously for the coming years.

Key Risks To Outlook

The Ghanaian

cedi remains vulnerable amid the sizeable current account deficit and could depreciate more swiftly than we anticipate.


Full Report Details at
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Mismanagement of oil revenues - perhaps stemming from insufficient institutional capacity - could dent investor perceptions.

Partial Table of Contents:

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Domestic Politics 1
Q&A On The Implications Of The 2012 Elections
- Ghana held presidential and parliamentary elections in December 2012. With the results now out and the president inaugurated, we consider here some key questions surrounding the polls.
Domestic Politics 2
On The Ground: The Post-Election Environment
- Our analyst in Accra spoke to a range of businesses following the December 2012 elections and found that sentiment was positive, with the vast majority viewing the political environment favourably. However, there was some concern regarding infrastructure and the potential removal of fuel subsidies.
Long-Term Political Outlook
Oil To Prove A Critical Test For The Polity
- Ghana's political risk profile is relatively favourable, especially in the context of West Africa. However, oil revenues will require careful management, presenting a formidable test for the government over the coming decade. 11
TABLE: POLITICAL OVERVIEW
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Upbeat Growth Forecasts Maintained, Despite Weak Data
- Although the official data on real GDP growth show a sharp slowdown in 2012, we nevertheless maintain our positive view on Ghana, given that a number of other sources point to buoyant economic activity. We forecast that Ghana will remain a regional and global outperformer thanks to the oil boom, with the economy growing by 8. 6% in 2013 and 9.2% in 2014 in real terms
TABLE: ECONOMIC ACTIVITY
Monetary policy
Rates To Remain On Hold Despite Upside Risk To Inflation
- Monetary policymaking in Ghana is complicated by concerns regarding validity of the official data for inflation and real GDP growth. Notwithstanding these issues, we expect the Monetary Policy Committee (MPC) to keep rates on hold over the course of the year. Inflation risks are to the upside given the new inflation basket which will be introduced in March, but the MPC will be wary of hiking rates too soon after the 2012 growth slowdown.
TABLE: MONETARY POLICY
Balance of payments
Current Account Deficit To Narrow, But Only Gradually
- We forecast that Ghana's current account deficit will remain in the double digits in 2013, at 12.4% of GDP following an estimated 12.6% of GDP in 2012. The outlook is promising for oil, gold and cocoa export revenues, but we expect imports of capital and consumer goods to keep the trade account deeply in the red.
TABLE: CURRENT ACCOUNT
Regional Economic Analysis
India's Footprint To Expand, Led By Private Sector
- India's rapidly growing economy will see its trade and investment in sub-Saharan Africa intensify over the coming years. In contrast to China's state-backed, resource-focused model, India's relationship with the region is more nuanced, with its prospects hinging more on private than state involvement. While likely to remain second best (or worse) in the hunt for Africa's resources, India's geographical and cultural ties with the region and its consumer-focused commercial interests create the potential for a more evenly balanced relationship.
Chapter 3: 10-Year Forecast
The Ghanaian Economy To 2022
Oil To Boost Growth Over 2013-2022
- We are sanguine on Ghana's growth prospects for 2013-2022 and forecast annual real GDP growth averaging 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: LONG-TERM MACROECONOMIC FORECASTS
Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
Institutions
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
TABLE: BMI LEGAL FRAMEWORK RATING
TABLE: LABOUR FORCE QUALITY
Infrastructure
TABLE: AFRICA - ANNUAL FDI INFLOWS
TABLE: TRADE AND INVESTMENT RATINGS
Market Orientation
TABLE: TOP EXPORT DESTINATIONS, 2001-2009
Operational Risk

Full Table of Contents is available at:
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About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

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