Spotlight on Africa: Ghana

by Yaw Owusu

Ghana, the first Sub-Saharan nation to achieve political independence and the second most populous country in West Africa (pop: 22 million), has gone through tremendous changes in the last 25 years, with considerable improvements in national security, governance and economic expansion. Political stability in almost 30 years have helped stimulate GDP growth rate of between 5% and 6% in the last 10 years and 3% to 4% in the preceding decades. Buoyed by the discovery of oil in commercial quantities and set to begin production in first quarter of 2010, Ghana has the world's best-performing stock index this year, with a gain of 46 percent. The gain is fueled, in part, by a relative boom (by Sub-Saharan African standards) in tourism, real estate, financial services and information technology.

Since 2005, management consulting firm A.T Kearney has ranked Ghana among the 40 most attractive outsourcing destinations in the world as companies competing for market share in the half-trillion dollar offshore outsourcing industry discover Ghana among other emerging IT markets. In November 2000, Texas-based Affiliated Computer Services established a data processing center in Ghana with 85 employees.  ACS expanded its staff to 1,000 the following year, and had more than 2,000 in 2005, becoming one of Ghana’s largest private employers. 
Technology firms in Ghana have access to high-speed fiber optic SAT-3 cable and 4 Intelsat (Atlantic Ocean) satellite earth stations. There are 30 universities and tertiary institutions, over ninety percent with access to broadband technology and strong curricula in information technology and management.

Total investment in the telecommunications industry in Ghana is estimated to quadruple from $384 million in 2003 to $1.56 billion by the end of 2008. Annual growth rates projected for the various sectors include 44.7% for mobile communications, 42% for fixed lines and 30.7% for payphones (Source: Kina Telecom; Wilkofsky Gruen Associates).

The influx of tens of thousand of expatriates and investors to Ghana and the discovery of oil in commercial quantities in the country has added more fuel to the entry to the economy of new energy, financial services, and engineering construction firms, among others.  Ghana registered $1.4 billion worth of investments for the 1st half year of 2008, including $934.7 million of reinvestments (capital goods imported) and $7.89 million equity transfers for the projects registered during the second quarter, during which 53 new projects were registered. The total estimated value for projects registered in the 1st half-year of 2008 is $3 billion, a sharp rise from the 2007 1st half-year estimate of $385.57 million.

Despite the substantial improvement in the country’s economy, Ghana remains heavily dependent on international financial and technical assistance. The dependence will hopefully fade as the government makes aggressive changes to improve ways of doing business. In 2007, World Bank ranked Ghana number 1 in Africa and 9th out of 175 countries in implementing business reforms.