31 May 2012
Ghana: a rising star in West Africa
It’s time to get to know Ghana
Speaking of Ghana, it is hardly a surprise if it is often associated with being an African soccer team in the once-in-four-year FIFA World Cup. Yet, Ghana should be worth more attention from investors and traders looking for new markets for diversification.
Ghana has expanded at a pace faster than the average in Sub-Saharan Africa (SSA) since 2008. While much of the world was struggling to ward off a fresh downturn, Ghana’s economy expanded by 14.4% in 2011, placing it among the world’s fastest-growing economies, thanks to the discovery of an offshore oil field that helped the country join the ranks of Africa’s oil exporters.
With 25 million people or some 8% of the population in West Africa, Ghana appeals to foreign investors with many impressive qualities. Thanks to its stable political environment, liberal economic policy, rich endowment of natural resources and strategic geographical location, Ghana is one of the most preferred destinations for foreign investment in the West Africa region.
Favourable political and business environment
Ghana is a shining example of thriving democracies in Africa. Being the first SSA country to gain independence from European colonialism 55 years ago, Ghana has shown to the world its triumph of establishing sustainable democracy, with track records of having held five consecutive democratic elections without a serious hitch over the past two decades.
In the EIU’s Democracy Index 2011, the country ranked ninth in the 47 countries in SSA and 78th in the world, comparing well with places like Hong Kong and Singapore. With a well-established and sustainable political regime, the Ghanaian government has been able to put a strong focus on economic reforms, making the country the easiest place to do business in West Africa. According to World Bank’s Doing Business 2012, Ghana ranked 63rd on ease of doing business, ahead of Turkey (71st), China (91st), Vietnam (98th), Indonesia (129th) and India (132nd), second to none in West Africa.
Undoubtedly, political risks are often seen as one of the most challenging issues to the foreign investors in Africa, as coups accompanied by violent military actions were not rare in many African countries over the past few decades. As a result, armed violence and political instability compromised the growth potential of many African countries.
Ghana, with a stable political system and business-friendly government, strategic geographical location, as well as rich natural resources endowment, has been hailed as one of the most preferred places of establishing regional offices in SSA.