Construction industry : Ghana ranked 7th in value, 6th in attractiveness – Report

Ghana’s construction industry value of $9 billion is ranked 7th in Sub-Sahara Africa, Fitch Solutions, research arm of ratings agency, Fitch, has said.

The country’s risk profile also places it as the 6th most attractive market in the region.

According to Fitch Solutions, research arm of ratings agency, Fitch, the country’s construction industry which grew by 14.2% in the first quarter of this year is reasonably attractive, compared to many of its peers in the region.

The report said contractors are exposed to less political risk than in many other markets on the African continent.

“In addition, we note that the generally lower complexity and shorter time frame of road construction projects will reduce their exposure to longer-term political and economic risks.”

Fitch Solutions further said construction firms in the road construction sector benefit from a comparatively attractive labour market, characterised by a large, expanding workforce, strong female participation, and low labour costs.

The country’s competitive wage costs, it also said are supported by comparatively high levels of productivity and moderate requirements for labour tax and social contributions.

“Despite the presence of strong labour unions, labour costs remain highly attractive on a regional and global scale, particularly for foreign investors”, it explained.

“Nonetheless, investors face risks associated with the country’s high severance pay requirements and rigid wage determination structures, which limit firms’ flexibility in adjusting their labour requirements in response to economic shocks”, it added.

Africa’s most populous nation, Nigeria is ranked 1^st in terms of the construction firm industry value on the continent.

Namibia and South Africa are however the most attractive construction markets in the region, placing 1^st and 2^nd respectively.