Earlier this year the mobile penetration rate in Ghana surpassed 100 percent. This does not necessarily mean that every Ghanaian has a mobile phone. Accounting for multiple sim cards or ownership of multiple mobile phones, telecom insiders estimate that mobile phone ownership is just approaching 16 million. Opportunity for growing the voice market is hard to ignore. But tower managers and telecom investors alike will see the greatest growth in data services.
A booming oil and gas sector is pushing for better all-around service to support their growth while telecom companies continue to build infrastructure in order to improve quality and stability. Installations should also increase network capacity in order to cope with upcoming traffic increases. The introduction of more competitive service bundles and specialized data products can definitely add to profit margins
The Banking Act in 2007 laid the foundation for change in the financial services industry. Since its passage, financial services in Ghana have improved tremendously. A thriving economy and growing incomes usually underline the potential of the financial sector. But Ghana has shown more promise than other countries in the region. Take Cameroon for example. It has a similar level of income, yet Ghana has more than double the number of ATMs per head of the adult population. Benin, also with a similar level of income, only has one-third of the banks per head of adult population compared to Ghana.
Services in the country have improved. The recent integration of banking ATMs among nine banks in the country, including Standard Chartered Bank, Zenith Bank and Ecobank, allows customers to use their bank cards at ATMs serviced by banks different than the card provider. Barclays created a buzz earlier this year with the announcement of deposit-taking ATMs in Ghana. The service will help to reduce the extremely long queues in banks. But these efforts are not enough.
Big ideas and little capital is the story of most Ghanaian banks. They are simply unable to meet the increasing demand from the energy, mining, oil & gas, and telecommunications sectors. Corporate banking and finance units are understaffed and inefficiently utilized. International trade thrives without adequate trade financing. Bank managers know this and are trying to rapidly improve the quality of service. But, as the story normally goes, capital investment is needed to maintain growth and meet the ever-increasing needs of consumers.
The story of rising real estate prices in thriving oil & gas markets gets old. But the returns never stop coming. The office and commercial sectors are plagued by poor management and lack of capacity. Downtown Accra and neighboring suburbs are seeing a surge in construction as developers see a growing influx of cash from foreign investors. Improvements in consumer financing and mortgages in the banking sector will also add to the opportunity for residential and commercial real estate.
Ghana is an industrial darling on the continent. It is more advanced than many other African countries. But it still nowhere near its full potential. Pipeline manufacturing for the oil & gas sector fails to meet the demand in timely fashion with quality. Sometimes you just want the basic things manufactured without hassle, says one industry insider, “but it is the small things that can slow up many projects.” Yet such lamenting should not deter foreign investors. Similar complaints have been thrown around about other industries. Every time a complaint surfaces, it encounters a group of anxious entrepreneurs waiting to solve it (a luxury of Ghana’s entrepreneurial makeup).
Imports of agro-chemicals and related agriculture products will slow over time as new companies work to manufacture agricultural inputs locally. Ghana has great potential as a car manufacturing country, possibly even electric cars. The growth potential of gas liquefaction continues to be the talk of the town as the queues at gas stations increase. Whatever the product, there is someone in Ghana at this moment discussing how to make it locally. The potential of the overall industrial sector in Ghana is unimaginable. But it can only be reached with more capital.
It is the catchall category, but Ghana is still in need of services across the board. The country requires management level education facilities (i.e., nursing, finance, etc) to meet the growing need in the country’s private sector. Medical services fail to provide high quality care, leaving foreigners and some locals to travel outside the country for specialized medical care. Information and communications technology (ICT) services are inadequate to meet the growing various needs of private sector businesses from SME to oil & gas.
A lack of investment in the above sectors has the potential to stymie Ghana’s economic growth. Great returns are available, especially if investors can connect investments to Ghana’s energy and mining boom.