Ghana has been ranked the most attractive market for trade and investment out of the 16 West African counties, according to the Fitch Solutions Operational Risk Index.
Key identified strengths of the country include policy consistency, openness to trade and foreign investment, stable institutions, and a wealth of natural resources.
“Businesses operating in the country enjoy many incentives for key areas such as infrastructure, agriculture, and manufacturing. The new oil sector – with associated export and fiscal revenue – should reduce the risks of macroeconomic instability and provide a substantial boost to growth over the long-term,” the report said.
Also, it is expected that medium-term growth will be driven by the country’s open investment policy, a gradual recovery in commodity prices, improvements in infrastructure and energy diversification, and increased digitalisation.
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However, the report points out that firms operating in the country face structural challenges emanating from onerous bureaucratic procedures, weak access to competitive financing mechanisms, and high import reliance – particularly for consumer goods, machinery and fuel; all of which significantly raise operating costs.
The Report assesses the trade and investment risks and opportunities facing businesses and investors in Ghana via insights into trade barriers, free trade agreements, investment incentives, investment restrictions, FDI flows, key import and export markets, government intervention, taxation, and development of the legal and bureaucratic systems.
Similarly, with a Crime and Security Risk score of 51 out of 100, Ghana outperforms the West Africa average of 33.3 and ranks in 1st place regionally and 90th place out of 201 markets globally.
Operational Risk Index Indicators
Under the economic openness segment, the country was assessed for the risks posed to businesses and investors looking to enter the market, assessing its overall openness to foreign direct investment and attractiveness as an investment destination compared with its regional and global peers.
The report highlights key investment barriers and incentives, and evaluates trade flows, main trading partners and products, and barriers to trade.
The government intervention segment highlights key risks stemming from the burden of taxation and financial barriers on foreign and local firms. It also analyses development of the financial market, density of the banking sector, availability of credit, and sophistication of the market.
Legal risk analysis examines observance of the rule of law and risks posed to businesses stemming from corruption. This segment evaluates the main risks that investors and businesses face from regulatory quality in a market and the protection of real and intellectual property rights.
It further assesses bureaucratic risks, the extent of e-governance development and governmental transparency.
