Investment Opportunities


Transportation and Warehousing


Ghana transport services has grown in recent years in response to the growing number of people moving into the major cities from villages in and around Ghana. On average, population in the major cities has grown about 2% per annum.  Most cities have now doubled their 1984 population, and demand for intercity transportation services has been on the rise.

Being the predominant mode of transport in Ghana, road transportation accounts for the vast majority of freight and passenger travel. Construction of roads has improved significantly since Ghana’s independence in 1957. Because the roads constructed after independence were not maintained and were deteriorating, the Structural Adjustment Programme was created in 1983.

Need for Intercity Transport Services

Inadequate infrastructure made it impossible to run prosperous and safe intercity transport services, but since the 1990’s, major improvements have been made to the network of roads. Industries like timber, tourism and mining have been on the rise since the 2000’s, which compounds the need to further upgrade public transport services. With demand outweighing supply, there is a real need for a safe and reliable intercity transport services.

Leading Companies

The following leading transit companies cover only about a third of the market.  (Most transportation services are offered by small operators with less than two vehicles.)
 
  • Metro Mass Transportation
  • State Transportation Company
  • VIP Bus Service
  • O.A Bus Services
  • City Express Bus Company Ltd

Challenges
 
  • Lack of modern equipment for road construction
  • Need for proper education in road construction
  • Maintaining roads.  
  • Infrastructure development and administrative overhaul is needed to support the growth of the transit trade industry. Port congestion and lengthy documentation procedures often slow down the transfer of goods. It will be necessary for the Shippers' Authority and Ghana Ports and Harbors Authority (GPHA) to put measures in place to effectively manage administrative procedures and traffic flow at Ghana's ports. Coordination and cooperation at inland border crossing points is also very important to keep the transit running smoothly.

Opportunities

The industry is open to adopting more modern practices and technologies to make the system more efficient according to the Minister of Roads and Transportation. Investors and private companies are invited to participate in the competitive bidding process for contracts set out by the Ministry of Transport. Mr Whitehill of Vodafone Ghana indicated that he believed Ghana needed a huge infrastructural investment, especially in providing contemporary roads and a total transport system that would connect the various communities in Ghana. "The Ghanaian economy is going to see the birth of enormous economic opportunities; but the current public infrastructure would not be able to support what we are about to see in Ghana."

The development of roads and transportation is a government priority.  Entry into the public transportation sector has been made easy and unrestricted. Despite the presence of a few government subsidized companies, competition is strong.

There is much room for improvement in Ghana's mass transportation industry. Increasing numbers of people are relying on the overburdened public transportation for intercity transport. Scheduled bus services and passenger rail services could provide a welcome alternative in this area. With increased activity in construction, real estate, and manufacturing, freight and trucking services are needed to allow contractors to move materials more efficiently. Many mining and construction companies do not have the resources to invest in a full fleet of trucks to transport supplies and could greatly benefit from partnership with trucking companies for that service.

There is need for inland port facilities including storage and warehouse space to accommodate cargo coming into the ports and major transit cities (including Kumasi) while cargo is getting processed and sorted for delivery. There are also a lot of opportunities for multi-national and cross-country trucking companies and other freight services to transport goods to their final destination.

Advantages

Ghana offers a number of advantages to investors in road and transportation services.
  • Transparency and friendliness – Ghana’s attitude to business is expanding the demand for freight transport services beyond its borders. The Economic Community of West African States (ECOWAS) convention has also broadened the capacity for utilizing Ghana’s transport services.
  • Tourism is now the nation’s third largest foreign exchange earner and the Ministry of Tourism estimates that tourists and business visitors spend on average 16% of their budget on road transportation expenses.
  • Low labour rates
  • New tolling practices
  • Democratic Institutions.
  • Government incentives – The government has created exemptions from its customs import duties on machinery, equipment and accessories imported exclusively for commencing enterprises.
  • Coastal location with ports – Ghana occupies an advantageous position on the West African coast to serve as a conduit for transit trade for goods entering Ghana's ports that are destined for the land locked countries to the north. Ghana is in competition for this transit trade with its neighbours to the east and west - Cote D'Ivoire, Togo, Benin and Senegal. Between 1998 and 2003, the Ghana Shippers' Authority took steps to establish relationships with shippers’ councils of Burkina Faso, Mali and Niger aimed a facilitating transit and offering support along the transport chain. As a result of such measures, transit trade volume increased from just over 100,000 tons in 1999 to over 700,000 by 2006. Both public and private institutions will need to continue to build and maintain relationships with bordering countries for transit trade to continue to grow.