Hyper growth in Ghana’s real estate and infrastructure development have opened up a wide-spread need for construction products and services for commercial buildings, housing units and transit construction. Ghana’s construction and building industry is doing very well, and is a significant contributor to the national economy in terms of both GDP and job creation.

 

The government is the major developer in the construction industry, dominating both in terms of contracts offered and funds allocated to projects. Billions of dollars in taxes are spent every year on construction projects. Donor funded projects and foreign direct investment are also considerable contributors to the industry. Additionally, much of the money coming into the country from Ghanaians living abroad goes into real estate and other development projects.

 

National Development Agenda

 

Ghana is anticipating extensive development in many sectors in the coming years, and has recognized that the current infrastructure will struggle to support this growth. For this reason, construction has been identified as an important part of the national development agenda. There will be many opportunities for companies and investors entering into this industry in the next few years. Local and international companies of all sizes compete for government and private contracts.

 

Challenges

 

  • Poor Project Management – often results in construction companies losing money on poorly managed jobs.
  • Poor Financial Management – construction companies often face financial difficulties when project logistics and finances are poorly managed, and payments may be delayed or unavailable at the end of the project, which limits construction companies’ ability to operate and grow.
  • No Registration Restrictions – there are no restrictions regarding who can be a registered contractor. Many construction companies are demanding stricter oversight to ensure that only qualified contractors are registered by the Ministry of Water Resources, Works and Housing.
  • Worker Training Programs – the industry is facing a serious decline in the apprentice system. Ghana once had an efficient apprenticeship system that produced skilled plumbers, woodworkers, carpenters, masons, etc. Today, there are far fewer men and women committing to apprenticeships than there were several years ago. Many technical and vocational schools offer courses in these fields, but many of them are underperforming due to lack of funding.
  • Availability of Quality Materials – although Ghana is extremely rich in natural resources, much of what is mined and extracted is sent abroad for processing and manufacturing, so construction companies have to import materials at high cost. Investment into the development of local materials such as steel tools, ceramic, concrete, PVC, electrical materials, paints, plumbing accessories and roofing would have a great effect on the industry. It would allow construction companies to purchase materials at much lower costs while supporting other local industries and keeping more money in circulation.
  • Limited Freight Services – Trucking and freight services are limited in Ghana and therefore companies must either invest in their own fleet or pay high costs to collect and transport materials around the country. This can especially be a problem if construction sites are in areas where the roads are poorly maintained and dangerous.
  • Availability of Modern Equipment – without proper funding, companies are forced to use outdated equipment and machinery that is not only inefficient, but also dangerous. Access to modern equipment and training on use is essential. There are significant opportunities for investment or partnership in this area.

 

Opportunities

 

There is ample opportunity for foreign companies to enter Ghana’s construction industry. With the booming real estate industry and high demand for infrastructure development, Ghana provides a wide range of possibilities for companies entering the market. Most non-emergency government contracts for road construction are open to both local and international companies through a process of competitive bidding. There are many smaller local companies that would also be seeking partnership for financial assistance, equipment and training. High demand for steel hand tools leads to the opportunity that Ghana’s large, untapped deposits of steel ore could be mined and used to produce tools such as hammers, anvils, screwdrivers, pipe cutters, clamps, wrenches, handsaws and similar tools.

 

Ghana’s main advantages in the construction industry include:

 

  • Plentiful raw materials, especially lumber, stone, granite and lime
  • Large pool of inexpensive, trainable labor
  • Exposure to the huge Economic Community of West African States (ECOWAS) market of over 250 million people.