CONSTRUCTION INDUSTRY – ECONOMIC CONTRIBUTOR

Growing year-on-year as a contributor to the economy, Ghana’s construction sector is increasingly dynamic and led by private sector participants. Ghana’s GDP surged to 4.1% in the first quarter of 2015, compared to 3.8% in the same period in 2014. Construction activity contributed $3.8bn to GDP in 2014 at current prices, according to the Ghana Statistical Service. This was equal to 12.7% of GDP and up 26.9% from $2.9bn in 2013.

The sector has grown strongly over the past decade, up from $280.3m in 2006, and has become of increasing importance to the broader economy, more than doubling as a contributor to GDP from 5.7% in 2006. Government investment is a major driver of growth, with a substantial pipeline of projects in transport infrastructure in particular expected to be rolled out in the coming years, often using public-private partnership models.

Construction in any country is a complex sector of the economy, which involves a broad range of stakeholders and has wide ranging linkages with other areas of activity such as manufacturing and the use of materials, energy, finance, labor and equipment.

The Ghana portfolio of World Bank comprises $2.140 billion in 24 projects, with a disbursed amount that has been increasing since FY09. In FY2015, $323 million was disbursed, and as of March 2016, $342 million had been disbursed. Ghana’s regional projects reflect the country’s role as a West African hub, with four projects of nearly $382 million in transport, energy, higher education, trade facilitation and agriculture.

MARKET DYNAMICS

The construction industry of Ghana is an important element of the national economy. One of the most important fundamentals boding well for the sector’s future is demographic change. Ghana’s population is growing quickly, at around 2% per year. Some 38% of the population is under the age of 15, according to the Population Reference Bureau, a US-based non-governmental organisation. This suggests both sustained demand for residential property and a growing market more broadly.

As there is a strong link between construction and economic activity the projected economic growth in Ghana and the emerging oil industry suggests that demand for construction goods and services will increase in the coming years. Many multinationals firms are moving into developing countries where a lot of markets are emerging, because in such countries there is a demand for construction work. Another reason demand for construction work is likely to increase is that Ghana is a developing country according to the United Nations Human Development Report and they have great need for almost all types of construction such as highways, roads, hospitals, power plants, dams, housing, maintenance on existing infrastructure, etc.

With the current growth in various sectors of the country changes will be need to be made in the infrastructure that is so critical to bolstering the expansion of the region. Like foreign companies, some local companies and investors are now competing for contracts. This is only the beginning of opportunities for companies to take advantage of the growth surge and begin to develop stature in the development of new property construction projects.

International construction groups operating in Ghana include Taylor Woodrow the market leader, Bilfinger Berger and Sogea-Satom.

LONG TERM POTENTIAL

Sweltering under a housing deficit of 1.7 million housing units which is projected to reach 1.9million by 2019 the government itself recognizes the need for a paradigm shift to arrest the situation and have their arms wide open to welcome foreign investors into the housing construction sector.
Accra Mall, A&C Mall, Marina Mall, West Hills Mall, Junction Mall, Achimota Mall and Oxford Street Mall are not enough to satisfy the growing demand for retail space in a city with a population of 4.2 million. It is obvious from the foregoing that the demand for office, hotel and retail space is extremely high in the country today, just as demand for high-end residential real estate continues to be brisk.

THE WAY FORWARD

Sweltering under a housing deficit of 1.7 million housing units which is projected to reach 1.9million by 2019 the government itself recognizes the need for a paradigm shift to arrest the situation and have their arms wide open to welcome foreign investors into the housing construction sector.
Accra Mall, A&C Mall, Marina Mall, West Hills Mall, Junction Mall, Achimota Mall and Oxford Street Mall are not enough to satisfy the growing demand for retail space in a city with a population of 4.2 million. It is obvious from the foregoing that the demand for office, hotel and retail space is extremely high in the country today, just as demand for high-end residential real estate continues to be brisk.

BUSINESS AND COMMERCIAL OPPORTUNITY

Ghana offers its people the opportunity to achieve the dream of living a comfortable lifestyle with its new development projects and continued economic growth.
The demand for upper-end commercial properties has increased because of the growth in GDP in Ghana. The increase in population and the emerging middle class has led to a greater demand for modern shopping centers and commercial malls. Modern office developments are springing up all across Ghana and are expected to continue to increase in 2015.