South African Investors Show Keen Interest In Ghana

South Africa investors are showing an increasing interest in Ghana, where new oil and gas fields have sparked economic growth.

Jeff Blackbeard, Africa Strategy Advisor for accounting and consulting firm, Moore Stephens South Africa, says enquires have been flowing in from companies keen to invest in sectors ranging from tourism and telecoms to health care in Ghana.

'Oil and gas are the catalyst for economic opportunity. We're seeing huge opportunities for the private sector in Ghana in spin-off and support industries. This will create the platform for further growth.'

According to recent World Bank statistics, the Ghanaian economy is projected to grow by over seven percent this year, buoyed by increased gold output and the recent commercialization of oil, as well as strong cocoa production. In its recent African Economic Outlook, the African Development Bank (AfDB) predicted 8.7% economic growth for Ghana for 2014.

Blackbeard, who recently returned from a visit to Ghana, says Moore Stephens has been interacting with companies in the telecoms sector as well as the hospital management and tourism sectors, where several hotel and timeshare developments are in the pipeline.

He believes there's a gap for South African companies who are interested in investing in mid-tier industries to support the burgeoning oil and gas industries as well as the growing gold industry.

'The next two years are an excellent time to get a foothold in Ghana,' believes Blackbeard.

Moore Stephens is considering setting up a corresponding firm in Ghana to service the rising interest from South African companies, as well as those from other countries.

'We're seeing big opportunities for the private sector in Ghana. As we see the growth and opportunities, we're keen to partner with local business leaders and the Ghanaian government to deliver on the long-term goals for the country.'

Ghanaian businessman, Steve Darko, who works for Moore and Stephens in its Harare office, says as a stable and growing economy, Ghana is seen by many as the gateway to West Africa and its 250 million consumers.

'It's still a cash economy, while property is dollarised. Oil is a new resource that can support secondary and tertiary services. There's a lot of urban development and the middle class is expanding rapidly,' says Darko.

Blackbeard says the excellent trade, economic and political relations that South Africa and Ghana share has helped to ease South African investment in Ghana.

'Whenever I go there, there seems to be increased excitement about the future. There is a real entrepreneurial spirit. During my recent visit, we spoke to clients, service providers and banks. Everyone's very positive about investing there. South Africans also have a good track record in Ghana, and we have similar ways of doing business.'

South African companies like MTN, Shoprite, Gold Fields and Game have established a strong presence in Ghana.

Amongst other services, Moore Stephens advises companies on strategy, due diligence and country-targeted HR matters as well as offering high-level tax advice.

Blackbeard suggests that companies considering investing in Ghana should be prepared to put time and effort into building relationships with their West African counterparts.

He also advises that companies understand the exact pricing of their products or services compared to their competitors and that they are aware of taxes, tariffs and logistical costs.

'Quality, price and logistics are vital. You should also ensure you know the key dynamics of your industry and address them as part of the country assessment.'

Darko sees some of the current challenges in Ghana as being opportunities for foreign investors. These include a lack of infrastructure in some sectors, energy inconsistency and a shortage of financial services skills.

He has identified several gaps in the market for mid-tier companies. These include opportunities for investors in the canned food sector, commercial farming, financial and tax services and in stand-alone energy products like generators and solar panels.

PREPARED FOR MOORE STEPHENS SOUTH AFRICA BY KIM CLOETE
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Moore Stephens South Africa has been operating since 2003 and is part of the Moore Stephens International Association (MSI), one of the world's major accounting and consulting networks with 299 independent firms and 636 offices in 101 countries. Ranked 11th in South Africa and 13th internationally by the International Accounting Bulletin, the firm is fast-growing with a modern, innovative and dynamic approach to the profession.