2022 INVESTMENT IDEAS (Part 1)

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Ghana remains one of the fast-growing developing economies not only in West Africa but the rest of the continent. It has also become one of the best business destinations in the sub-region attracting several investment opportunities and creating a conducive business environment for investors. Factors such as stable democratic climate, ease of doing business, accessibility, talented workforce, growing population & rising middle class, credit rating as well as other international benchmarks make Ghana the number 1 destination for doing business and investing.

As an investment advisory firm, Annan Capital Partners has been committed to connecting investors to investment opportunities within the African continent. Our focus has been a core growth industry such as agribusiness, ICT, renewable energy among others. If you are looking to invest in Ghana in 2022, here are three sectors investors can look at.

Agriculture & Agri-Processing  

In Ghana, Agriculture contributes to about 54% of Ghana’s GDP and accounts for over 40% of export earnings with about 52% of the country’s workforce involved in agriculture, providing over 90% of the food needs of the country. Ghana’s efforts to prioritize agricultural-led initiatives over the years have proven to create employment opportunities for its burgeoning population, promote food security and accelerate sustainable development. Despite the government’s efforts, the sector remains largely untapped and provides enormous opportunities to invest within the agriculture value chain.

Factors like vast arable land, good climate conditions, and abundant water resources make Ghana an ideal place for large-scale commercial farming of various crops including grains, vegetables, and tropical fruits. In 2019, the World Bank placed the value of Ghana’s Agriculture sector at the US $ 11.5 billion contributing 17.5 % of Ghana’s GDP. As part of our long-term goals of investing in Ghana’s agriculture sector, Annan Capital Partners invested in IGrow Africa, an agribusiness-themed documentary that highlights parts of the agribusiness sector value chain.

Cocoa continues to draw in a huge amount of revenue. Other crops such as cashew and shea nut also generate millions in revenue. In 2018, the Ghana Export Promotion Center recorded that the two crops generated revenues of the US $ 378 million and the US $ 90 million respectively.

Despite the prospects, the agriculture value chain faces various challenges in terms of funding, infrastructure, poor road network among others. Nonetheless, investors should expect exponential growth because of various government interventions and incentives such as planting for food and jobs, agriculture mechanization, greenhouse projects among others.

Oil & Gas

Since 2008, Ghana’s oil & gas industry has seen rapid development attracting foreign investment. Growth in Ghana’s oil and gas industry is expected to maintain a steady growth rate in the coming years. As of 2019, the total proven reserve base was approximately 660 million barrels of oil and 2,312.4 billion cubic feet of gas with over 36,000 km2 and 103,600 km2 of open offshore and onshore acreages. Though the sector is still in the developing phase, there are several investment opportunities in the refinery, distribution & transportation, and marketing of petroleum products with the setup of Oil Marketing Companies. 

 

Energy & Renewable Energy

The energy sector contributes significantly to Ghana’s socio-economic development with crude oil being one of Ghana’s most valuable exports and a major contributor to the national GDP. The sector can be classified into two main categories, petroleum, and power.

Ghana’s petroleum industry is grouped into the upstream and downstream sectors. The upstream sector involves exploration, production, procurement, disposal, and decommissioning of crude oil. On the other hand, the downstream sector focuses on the refinery, procurement, distribution, and marketing of crude.

Ghana’s power sector energy mix consists of hydro generation, thermal generation, embedded generation, and renewable energy generation.

In 2018, the Bank of Ghana indicated that the value of crude exported was 4.5 billion dollars, becoming the second-highest foreign exchange earner after gold. Ghana is also a net exporter of power to Togo, Benin, and Burkina Faso. With ongoing grid expansions, power export is projected to increase within the next five years.

Prospects in the energy and renewable energy sector for investors is enormous. Currently, the renewables sector remains largely untapped with vast opportunities to generate power through solar and wind technologies. The upstream petroleum sector is open for more exploration whilst the downstream sector is another area to consider.

The petroleum midstream sector also has huge investment opportunities within the oil refinery process to augment the efforts of the Tema Oil Refinery (TOR)