Some construction workers
FITCH SOLUTIONS’ latest report on Ghana has indicated that the country’s construction industry will slowdown, growing by 4.1 per cent year-on-year, from 5.7 per cent recorded in 2021.
The report on Ghana dubbed “Lower Public Investment to Slow down Ghana’s Construction Industry Growth,” said unlike other markets, Ghana’s infrastructure construction industry is unlikely to benefit from higher oil and gold prices.
This is drawn from the expected increase in public revenues to be channeled towards debt servicing and the country’s high public wage bill rather than capital projects.
“We forecast Ghana’s construction industry to grow by 4.1% year-on-year in 2022, a slowdown compared to the estimated growth of 5.7% y-o-y in 2021.”
Accordingly, it has forecasted government capital expenditure to shrink to 3.3 per cent to gross domestic product in 2022 and 2.9 per cent in 2023, down from 3.7 per cent recorded in 2021.
“While this puts capital expenditure levels above those in 2018-2020, when Ghana’s construction industry growth averaged -0.1% per year, it remains below the comparatively high annual average levels of 4% of GDP between 2010 and 2017,” it mentioned.
During the period between 2010 and 2017, the construction industry growth average 8.1% per year.
“In 2023, we forecast Ghana’s construction industry growth to accelerate slightly as we forecast the depreciation of the Cedi against the US dollar to slow down to 4.6% year-on-year. Generally, this will reduce revenue risks for foreign investors, while lower inflation will improve demand for residential and non-residential construction,” it stressed.
However, Fitch Solutions concluded that the country’s access to international capital markets will remain constrained and will continue to weigh on public infrastructure spending as well as the market’s construction industry growth.
A business guide report