Ghana’s construction industry is expected to slowdown in expansion this year, growing by 4.1% year-on-year, from 5.7% recorded in 2021, Fitch Solutions latest report on Ghana dubbed “Lower Public Investment to Slow down Ghana’s Construction Industry Growth” has revealed.

Unlike in other markets, Fitch Solutions said Ghana’s infrastructure construction industry is unlikely to benefit from higher oil and gold prices, as it expects increased 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% y-o-y in 2022, a slowdown compared to the estimated growth of 5.7% y-o-y in 2021”.

Accordingly, it is forecasting government capital expenditure to shrink to 3.3% to Gross Domestic Product in 2022 and 2.9% in 2023, down from 3.7% recorded in 2021.

“We forecast government capital expenditure to shrink to 3.3% year-on-year of GDP in 2022 and 2.9% year-on-year of GDP in 2023, down from 3.7% year-on-year 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.”

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.