The government of Ghana has identified transport as one of the priority areas for development under the Medium Term Plan. Transport services, and in particular mass transportation, offer exciting opportunities for investors.
1. Construction of roads and maintenance
Major opportunities in the sector are in the form of contracts between the Ministry of Road and Transport (MRT) and local and international engineering firms via competitive bidding. Eligibility for bidding on public road construction and rehabilitation projects requires the registration of prospective contractors with the Ministry. Donor groups such as the World Bank, African Development Bank, JICA, USAID, DANIDA, DFID and GTZ often underwrite road projects tendered by the MRT.
2. Transportation services
Entry into the public transportation field is unrestricted. Most services are offered by private operators and competition is keen despite the presence of two state-owned firms, City Express Bus Company Ltd and the Omnibus Services Authority, both of which are currently on the government's divestiture list.
3. Automobile sales and service
Vehicle sales and after-sales service is another growth area. Although there are companies already operating in the market, more investment is needed to diversify services.
4. Other opportunities include establishment of a scheduled bus system, rail upgrades and passenger rail transport on chosen corridors, lake transport system (to handle trade to and from land locked neighbouring countries such as Burkina Faso, Mali and Niger), air transport operators for domestic and sub-regional services, as well as upgrading of existing trunk roads.
Sector overview
Road transport is the predominant mode of transport in Ghana, accounting for the vast majority of freight and passenger travel. The country's road construction boom followed independence in 1957, making it a hub linking the entire West African trading Zone. Privatisation of many transport and logistics enterprises has led to greater efficiency, though the government continues to foot the bill for road construction and maintenance, while private contractors assume the implementation task.
Reasons to invest in roads and transportation
Regional trading hub: Demand for freight services transcends Ghana's borders, with land-locked neighbours depending on the country's transport services.
Growing tourism trade: Estimates show the number of business and tourist visitors to Ghana is increasing each year, and that tourists spend around 16% of their budgets on transportation expenses. There is therefore a growing need for vehicle leasing enterprises to serve these groups.
Other advantages include new tolling practices which have paved the way for Build, operate and Transfer (BOT) systems, availability of affordable construction materials, excellent electricity, communications and water systems; and low labour rates.
For more information on investing in transport sector contact the Ghana Investment Promotion Center (GIPC).
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