Ghana boasts of a low import duty on vehicles by an estimated 31 per cent in Sub-Saharan Africa as well as a favourable regulatory environment, which will make it easier for automakers to operate in this market, international ratings agency Fitch has said.
“Ghana also boasts a large driving-age population, scoring 62.9 out of a possible 100, which elevates the country's reward potential in the long term and highlights the growth potential for automakers entering its market”, Fitch said in its latest research on “Sub-Saharan Africa Autos Sales: Rewards Remain Too Low to Justify Undertaking Risks.”
Mauritius placed first followed by South Africa in second and Botswana in third, taking the top three positions in Fitch Autos Sales Risk/Reward Index (RRI) for the Sub-Saharan region.
However, they struggle to break through into the top 50 countries globally as Mauritius only manages to achieve 69th position.
The strengths of these countries Fitch stated lie in their low risk business environments, developed autos markets, relatively high consumer purchasing power and good quality of road infrastructure
Ghana is on the rise
With a Risk/Reward Index score of 37.7, Ghana ranks fourth in the Sub Saharan Africa region and is the fourth lowest risk automotive market in the region and the lowest in the Economic Community of West African States (ECOWAS) sub-region.
The country's strengths Fitch said lie in its overall low risk environment, which outperforms the global average of 50.0, especially in terms of political risk.
“We believe that Ghana's political stability is the linchpin for the future of its domestic automotive production industry. In our Autos Sales RRI, under the short-term political risk index and long-term political risk index categories, Ghana scores by far the best among the West African countries that we cover and comes in at second place in the wider SSA region.”
This Fitch said highlights how stable the country's political outlook is for the next two years. Under the long-term political risk index category in its RRI, Ghana scored 70.2 out of a possible 100, compared to the West Africa regional average of 17.4 (excluding Ghana), which indicates the stability of the country's political environment over the next five-to-10 years, which gives Ghana a distinct advantage when it comes to its operating environment for automakers compared to its regional peers.
Tanzania, Kenya and Uganda followed in 5th, 6th and 7th respectively with Nigeria coming in at 9th.
Under the Reward pillar of our RRI, the SSA region outperforms the global average of 50.0 under two categories, namely 'vehicle sales growth, five-year forecast average' and 'driving age population'.