Business in Ghana

MAS 151: BUSINESS IN GHANA

(WEBSITES OF ALL RELEVANT MINISTRIES AND SECTORS ACKNOWLEDGED)

SECTORS AND INVESTMENET OPPORTUNITIES

1.1 INVESTING COTTON AND TEXILES

Investing in Ghana's textiles and garment industry

Sector Overview

Textile manufacturing in Ghana is an industry consisting of ginneries and textile mills producing batik, wax cloth, fancy printed cloth and Kente cloth. Firms have located in Ghana to serve local and regional markets with printed African patterned fabrics. The industry has shown signs of significant growth in recent years, promoting high-quality traditionally designed fabrics as "Made in Ghana" to niche markets, especially the US.

Ghanaian textile companies prefer to locate within designated industrial areas to take advantage of Ghana's free zone regime and stable operating environment. Today, Ghana's textiles industry includes vertically integrated mills, horizontal weaving factories and the traditional textile manufacturing firms involved in spinning, hand-weaving and fabric- processing.

Textile exports include:

• Cotton yarn • Cotton fabric • Printed fabric • Polyester fabric • Blankets • Bed sheets

The dry, savannah climate in the northern regions of the country is ideal for the cultivation of cotton, which is the primary material used by mills, weavers, batik, and tie-dye manufacturers in Ghana.

The industry is supported by National Vocational Training Institutes throughout the country. These institutes provide basic practical and theoretical training in tailoring and dressmaking. There are also a growing number of private fashion design institutes and internationally acclaimed designers that teach latest techniques to aspiring textile designers.

The government has initiated various policies aimed at restructuring and improving the textiles industry. The objectives include

• Increase of employment opportunities for the growing population • Expansion and diversification of the economy • Promotion of both domestic and foreign investment

Ghana has a reputation for producing high quality, traditionally designed printed cloth. The widely celebrated Kente cloth of the Ashanti and Ewe people are hand-woven and brightly coloured with traditional symbols and design.

African textiles have gained an international reputation for their patterns, but national branding had not been promoted heavily in the past. Promoting high quality, traditionally designed fabrics as "Made in Ghana" appeal to the niche USA markets that manufacturers are beginning to serve.

The following investment opportunities are available:

Production

Textile companies to set up factories in Ghana to produce for the US market.

Marketing and Distribution

• Buyers and sellers to make exploratory visits to Ghana and request trial orders. • Textile manufacturers to set up factories in Ghana to supply fabrics.

Raw Materials

Fabric suppliers to supply raw material requirements for Ghanaian textile manufacturers.

Technological and Supporting Services

• Suppliers of textile manufacturing equipment to supply the Ghanaian market on a sustainable basis. • Need for suppliers and financiers of factory building technology.

The Market

The main markets for textile and textile products are mainly the US and EU. Over the last five years, exports of cotton textiles and textile products have shown consistent upward increases.

As seen in table 1 total exports of textiles and garments amounted to US $ 53,549,700 in 2011. Also, the volume of textiles and garments exported in 2011 was 24,387,967.

The leading product was cotton fabrics (grey baft), which contributed an amount of US $19,499,290 with a total weight of 823,198 kgs. The second leading product was raw/lint cotton which accounted for US $16,928,721 with a total weight of 8,557,724 kgs.

Table 1

PRODUCTS WEIGHT VALUE

KGS USD Garments/clothing 317,435 2,408,271 Cotton fabrics (grey baft) 823,198 19,499,290 Textile products nes 12,545,465 11,396,261 Sacks and bags 1,840,285 2,223,150 Carpets 111,301 333,532 Sewing Thread 43,064 260,017 Twine, cordage, rope 81,589 35,449 Bedspreads 39,955 107,488 Raw/lint cotton 8,557,724 16,928,721 Linens 1,942 4,101 Curtains 272 6,647 Towells 43 214 Tarpaulins 9,726 149,461

Sub Total 24,371,999 53,352,602

1.2 INVESTING IN GHANA'S FOOD PROCESSING SECTOR

SECTOR OVERVIEW The food processing industry plays a major role in Ghana’s economy. Major food crops in Ghana generally consist of cereals and starchy foods. Cereals include maize, rice, millet, guinea corn and sorghum, while starchy crops include cassava, yam, cocoyam (taro) and plantain. Currently, food processing in Ghana is done by medium scale enterprises. Over the years, the Government of Ghana has implemented policies that add value to Ghana’s raw agricultural products (e.g. cocoa, cotton, oil palm, etc.). In recent times, intensive efforts have been made by government to process some of these products; for example, volume of cocoa beans processed locally has doubled in the last decade.

Investment Opportunities

Production

Investment opportunities exist for producers and processing companies in the following areas:

• Companies to process maize, yams, cassava, oil palm, citrus, mango, cashew, coconut, cowpea and traditional vegetables e.g. tomatoes, pepper • Production of value-added cocoa and coffee products • Production of improved seeds and agro-chemicals (fertilizers, pesticides, weedicides) • Processing of dairy products • Production of inputs such as fertilizers, pesticides, and fungicides

Raw Materials

• Processors and manufacturers to supply packaging materials • Producers to supply planting materials

• Production of horticultural products for processing (e.g. maize, yams, cassava, oil palm, citrus, mango, cashew, coconut, cowpea and traditional vegetables e.g. tomatoes, pepper etc.) for national, regional and European Union (E.U) markets • Development of private irrigation facilities

Technological and Supporting Services

• Processing machine manufacturers to supply cold chain equipment • Companies to provide installation of cold chain equipment • Companies to train manufacturers in packaging and packaging technology • Companies to train producers in the use of food processing technology • Machine manufacturers to establish hatcheries for day-old chicks • Processing machine manufacturers to supply processing plants • Suppliers and financiers of factory building technology.

Marketing and Distribution

• Companies to provide post-production services (transport, packaging, cold vans) • Companies to provide distribution of improved seeds, planting materials and agro- chemicals (fertilizers, pesticides, weedicides) • Companies to market processed foods in international markets

The Market

Agro-food Processing

Ghana has a wide range of agro-products that are currently exported in their raw state. Opportunities therefore exist in the agro-food processing sector for manufacturing industries to add value to local agricultural products e.g. cocoa, cashew, tropical fruits and vegetables. With the emphasis shifting from raw exports to processed exports, the investment opportunities are endless.

Guinness Ghana Limited and Accra Brewery Limited have introduced cassava beer into the Ghanaian market which is currently doing very well. The introduction of the beer has provided ready market to cassava farmers. This is partly responsible for the general increase in the area put under cassava production. So far, a total of 4,741mt have been

purchased, with Guinness Ghana Limited buying over 74 per cent and Accra Breweries Limited buying the rest.

Brazil Agro Business Ltd, PVL, GADCO, Aveyime, Afife/Weta, ICOUR, are also large scale rice commercial farms operating under irrigation. Their milled and branded packaged rice are sold everywhere on the Ghanaian market. These farms are contributing immensely to the increased rice production and consumption in Ghana.

Seafood Processing

The seafood processing sub-sector is emerging as one of the attractive sectors for investment. The free zone can currently boast of one of the major fish processing firms in West Africa, processing about 170 tons of seafood (tuna) a day. There is, in fact, a large volume of tuna, available all year round in the coastal water of Ghana. The processing of tuna and many other marine species therefore presents a great opportunity to any investor interested in seafood processing.

Table 1: Ghana’s exports of some prepared or processed foods– 2014

Product Weight (Kgs) Value (US $) Cocoa Paste 170,096,360 568,820,471 Cocoa Powder 27,543,179 64,040,806 Cocoa Shells, Husks 21,199,234 12,208,875 Cocoa Confectionery 1,415,423 4,763,639 Chocolate 50,977 128,924 Cocoa Butter 2,860 34,463

Dairy Products Milk & Cream 2,431,354 13,873,683 Butter, Cheese Etc. 370,045 195,144 Yogurt: 30 12

Prepared Foods Canned Tuna 24,090,904 151,812,675

Cut Fruits 6,373,739 50,188,806 Baby Food 4,348,967 24,147,316 Coffee Prepared 3,235,277 13,172,758 Groundnuts Prepared 4,605,318 11,243,457 Sweet Biscuits 4,149,145 10,003,071 Pasta 3,814,024 4,746,943 Tomato Paste 1,963,545 1,329,466 Canned Sardine 370,178 423,955 Canned Meat 684,616 412,434

1.3 INVESTING IN GHANA'S FORESTRY SECTOR

Sector Overview

Ghana's quest to build a strong economy and vibrant business market requires the exploitation of all potential business avenues to create employment and prosperity. One such area which has lots of business potential is the forestry industry which the government, private sector and all stakeholders have not been able to maximize its value. Ghana has a land area of 238,500 km 2 made up of two (2) broad ecological zones namely a high forest zone covering much of the southern third of the country (34%) and a savannah zone covering two thirds of the considerably drier northern Ghana (66%). The agriculture sector which includes forestry is the largest contributor to GDP whilst forestry alone contributes an estimated 4%. The key government institutions in the sector are the following:

• Ministry of Lands, Forestry and Mines (MLFM): responsible for policy direction and monitoring of programmes towards achieving national goals • Forestry Commission (FC): responsible for advising the sector Minister on policies to regulate the management and utilization of forest and wildlife resources • Forestry Research Institute of Ghana (FORIG): responsible for undertaking research and development activities towards solving problems relating to the forestry sector

The private institutions or entities consist of land owners, communities, clans and individuals on whose behalf the government manages the forest and wildlife resources. Others are the logging companies that operate timber concessions to supply raw materials to sawmills, and other wood processing companies that convert the timber into secondary products mainly for the export markets.

Economic Importance of Forestry Sector

1) The formal forestry sector employs about 120,000 Ghanaians with employment pre- dominantly in log processing industry. The timber industry is the fourth largest foreign exchange earner after minerals, cocoa and oil exports. Primary wood and processed products account for 89% and 11% of timber exports respectively.

The formal forestry sector consisting of around 200 timber processing mills is export oriented. For example the total exports of timber products in September 2012 amounted to €7,536,507.29 representing about 13% decrease from the €8,637,092.59 earned from exports in August 2012. Additionally only around 15% of the domestic market was supplied by the formal sector.

2) The informal forestry sector, mainly chain saw milling is almost equal in size to the formal sector in terms of employment and production and also provides the bulk of the supply (85%) for the domestic market, with estimated volume of around 0.5 million m3 and market value of around GHC 280 million. It also provides employment for around 130,000 people and livelihood for 650,000 people and is the source of considerable revenue to the mostly urban financiers of their operations (Marfo, 2010)

Investment opportunities include:

• Establishment of Wood and Non-Timber Forest Products (NTFP) based Small-Medium Enterprises (SMEs) and plantations • Establishment of Farm Forest Wood Lots • Establishment of Pulp Paper and Panel Industries

• Establishment of Plantation Based Construction Grade Timber and Fiber Supply • Provision of tree seedlings for plantation species e.g. teak

Information available indicates that there is high demand for medicinal plants from Ghana. Scientific information available indicates most parts of Ghana are suitable for the cultivation of various medicinal plants. Particular plants like Cola Nitida locally known as "Bese", Alchornea Cordifolia (Ogyama), Griffonia Simplicifolia (Kagya), are high in demand by both international and local markets.

Investing in Ghana's Forestry Sector

1.4 INVESTING IN GHANA'S AGRICULTURAL & AGRO-PROCESSING INDUSTRY

Sector Overview

Agriculture in Ghana is recognized as the mainstay of the economy with a greater impact on poverty reduction than other sectors. It is also critical for rural development and associated cultural values, social stabilization, environmental sustainability and buffer during economic shocks and the sector currently employs about 48% of the total workforce.

The country is classified into three main agriculture zones. The forest vegetation zone consists of parts of Western, Eastern, Ashanti, Brong Ahafo and Volta Regions. The northern savannah vegetation zone includes the Upper East, Upper West and Northern Region while the coastal savannah includes mainly the Central, Greater Accra and parts of Volta Region.

The northern savannah zone is the largest agriculture zone. Most of the nation’s supply of rice, millet, sorghum, yam, tomatoes, cattle, sheep, goat and cotton are grown in the region. In recent times, mangoes, cotton and ostrich commercial farms are also gaining footholds in the northern zone.

Investment opportunities exist in the following areas;

• Production of improved seeds and agro-chemicals (fertilizers, pesticides, weedicides)

• Processing of some agricultural produce. • Production of all agricultural products such as cash crops, horticultural crops and livestock for the national, regional and European Union (E.U) markets. • Production of veterinary drugs, vaccines and chemicals, feed and feed ingredients for the livestock sector. • Fish farming • Production of wood and non-timber forest products (NTFP) • Establishment of pulp paper and panel industries • Establishment of wood plantations • Provision of tree seedlings for plantation species e.g. teak

Technological and Supporting Services

Investment opportunities exist in the following areas;

• Provision of tractors with basic implements, planters and harvesters • Provision of field and laboratory equipment for quality assurance • Companies to produce and install cold chain equipment • Supply of machinery to establish hatcheries for day-old chicks • Processing machine manufacturers to supply agro-processing and packaging equipments/ plants • Suppliers and financiers of factory building technology • Manufacturers of fishing nets, ropes, netting materials, outboard motors and other fishing inputs to fishers. • Development of aquaculture production facility (cage and earthen pond). • Producers of fish feed • Technological and consulting services • Research and agriculture development services • Inspection and grading according to international standards to make the deliveries acceptable in international markets • Capacity building on standards, training and certification

Marketing and Distribution

Investment opportunities exist in the following areas;

• Companies to provide post-production services (transport, packaging, storage facilities and cold vans) • Companies to provide distribution of improved seeds, planting materials and agro- chemicals (fertilizers, pesticides, weedicides). • Distribution of veterinary drugs, vaccines and chemicals, feed and feed ingredients. • Companies to market processed foods in international markets such as the EU, Asia and ECOWAS markets.

The Market

Ghana commands a great share of the African quota of EU market in fruits and vegetables export. Other leading processed agricultural export products were processed tuna, cut fresh pineapples, other prepared fish and tomato paste.

Cocoa has historically been a key economic sector and a major source of export and fiscal earnings. Ghana is the second largest cocoa-growing country in the world.

The leading non-traditional products were Fresh or chilled tunas, Shea nuts, Cashew, Fresh or chilled fish, yams, Banana and Pineapples.

Investing in Ghana's Agricultural & Agro-Processing Industry

The coastal savannah is notable for rice, maize, cassava, vegetables, sugar cane, mangoes and coconut cultivation as well as livestock rearing. Sweet potato and soybean crops are also viable in this agro–ecological zone, under irrigation. The lower part of this zone is drained by the River Volta and other streams and lagoons. These water resources present opportunities for fish farming (aquaculture).

In the forest zones where rainfall is very heavy, cocoa, coffee, oil palm, cashew, rubber, plantain, banana and citrus crops are mostly cultivated in these areas.

The major strengths of the agricultural sector include a diversity of commodities, well- endowed drainage basin, a well-established agricultural research system and a relative proximity to the European market.

The agriculture sector consists of four (4) main subsectors:

• Crops: Cash crops, horticultural crops and tree crops. • Livestock: Ruminants , non-ruminants and poultry • Fisheries: Marine, inland and aquaculture • Forestry

Crop Production

Food production in Ghana for the past few years has shown an upward trend, thus increasing the country’s potential towards complete food self-sufficiency.

Generally, the production levels of major crops increased with the exception of maize which reduced slightly. Maize production declined marginally by 0.15%. Whiles a number of factors may account for this decline, the high cost of agricultural inputs and poor weather conditions in some parts of the country were main suspected causes.

The production of roots and tuber crops such as cassava and cocoyam experienced slight increases (2.5% and 2.4% respectively) in 2014, and resulted in about 408 metric tonnes and 31 metric tonnes respectively. This increased production can be partly due to interventions of the Root and Tuber Improvement and Marketing Project (RTIMP) and the West African Agricultural Productivity Programme (WAAPP) through improved technology generation, dissemination and adoption.

Additionally, there is availability of market for root and tuber crops. For example, cassava is being used as a raw material in the brewery industry. In 2014, Guinness Ghana Limited (GGL) and Accra Brewery Limited (ABL) purchased a total of 801,946.32 metric tonnes of raw cassava at a value of GH¢1,593,680 from farmers in some selected districts.

Livestock Production

appreciable increase in domestic meat production, the rate of increase is decreasing marginally (6.59% in 2013 and 6.0% in 2014). This increase has ultimately led to a reduction in meat imports. In 2013 import of meat and meat products reduced by 9.68% whereas in 2014 an impressive reduction of 39.7% was achieved over the previous year. The decrease in meat imported is reflected in the drastic reduction in meat available for consumption by up to 39.6%.

Fish Production

The fisheries sub-sector also contributes to the achievement of the country’s food security goals by providing high quality and affordable fish protein in the daily diet of many households. The sub-sector is estimated to contribute about 60% of the protein requirements of Ghanaians. Total fish produced in 2014 from all sources including captured (marine and inland) and cultured (aquaculture) was 413,077 metric tonnes as against total import of 145,910 metric tonnes in 2013.

Local production contributed about 74% of the total fish needs of the country. Further analysis shows that, out of the total production in 2014, marine fisheries accounted for about 70%, inland fisheries 21% and aquaculture 9%.

• Inland Fish Production

Inland fish production involves inland capture, cultured fisheries and aquaculture based fisheries. The main sources include; the Volta Lake, lagoons, reservoirs, irrigation dams and dug outs as well as other inland water bodies. The Volta Lake with a surface area of 8,480km2 and 5,200 km2 shoreline forms the backbone of the total inland captured fish production, as it contributes about 90% of the total production from the sub-sector.

• Production of Cultured Fish

Cultured fish production is basically aquaculture production. This is usually obtained from cages, ponds, dams, dugouts and reservoirs. Aquaculture production has been on the rise since 2008. This was largely as a result of government’s strategy of investing in the aquaculture production. In line with the government’s intervention, Ministry of Fisheries and Aquaculture Development is developing a programme dubbed nucleus – out-grower and input support scheme to promote aquaculture. The implementation of the scheme will

augment national fish production through aquaculture. Under the scheme, selected potential and existing fish farmers will be trained and provided with inputs.

Forestry

Ghana’s forests make up part of the Guineo-Congolean phytoecological region. Forests broadly fall into two vegetation zones, each with different vegetation and forest types. The High Forest Zone covering 34% and the Savannah Zone covering 66% of the land area.

About 135,000ha of plantations have been established under the National Forest Plantations Development Program. A forest plantation strategy is under preparation according to which there is about 1 million ha of land available for the establishment of forest plantations.

The timber industry is the fourth largest foreign exchange earner after minerals, cocoa and oil exports. Primary wood and processed products account for 89% and 11% of timber exports, respectively. In addition to timber, forests provide the main source of domestic energy in the form of fuel wood and charcoal.

Export of Non-Traditional Agricultural Commodities

Export of non-traditional agricultural products contributed 13.22 % of the total earnings from the export of all non-traditional commodities in 2013 and 13.57% in 2014, with a marginal increase of 0.35 percentage points. Generally, there was a reduction in the quantities of most non-traditional agricultural commodities exported in 2014 over 2013. There was a corresponding decrease in the value of commodities exported where quantity decreased except for oil seeds and nuts. In this case, while quantity exported reduced by 23.61%, value increased by 36.9% as illustrated in table below.

Investing in Ghana's Agricultural & Agro-Processing Industry

Investment opportunities exist in the following areas;

• Production of improved seeds and agro-chemicals (fertilizers, pesticides, weedicides) • Processing of some agricultural produce. • Production of all agricultural products such as cash crops, horticultural crops and livestock for the national, regional and European Union (E.U) markets.

• Production of veterinary drugs, vaccines and chemicals, feed and feed ingredients for the livestock sector. • Fish farming • Production of wood and non-timber forest products (NTFP) • Establishment of pulp paper and panel industries • Establishment of wood plantations • Provision of tree seedlings for plantation species e.g. teak

Technological and Supporting Services

Investment opportunities exist in the following areas;

Marketing and Distribution

Investment opportunities exist in the following areas;

The Market

Cocoa has historically been a key economic sector and a major source of export and fiscal earnings. Ghana is the second largest cocoa-growing country in the world.

The leading non-traditional products were Fresh or chilled tunas, Shea nuts, Cashew, Fresh or chilled fish, yams, Banana and Pineapples.

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Investing in Ghana's Agricultural & Agro-Processing Industry

Sector Overview

Region while the coastal savannah includes mainly the Central, Greater Accra and parts of Volta Region.

In the forest zones where rainfall is very heavy, cocoa, coffee, oil palm, cashew, rubber, plantain, banana and citrus crops are mostly cultivated in these areas.

The agriculture sector consists of four (4) main subsectors:

• Crops: Cash crops, horticultural crops and tree crops. • Livestock: Ruminants , non-ruminants and poultry • Fisheries: Marine, inland and aquaculture • Forestry

Crop Production

Food production in Ghana for the past few years has shown an upward trend, thus increasing the country’s potential towards complete food self-sufficiency.

Livestock Production

Demand for livestock products including poultry is increasing in the country. Factors accounting for this include population growth, increased urbanization, rising incomes and improved attitude toward the intake of protein. Livestock production is thus increasing in response to this growing demand. Meat and meat products available for consumption increased by 6.59% between 2012 and 2013. However, in 2014 an average increase of 6.0% was recorded. Although this shows an appreciable increase in domestic meat production, the rate of increase is decreasing marginally (6.59% in 2013 and 6.0% in 2014). This increase has ultimately led to a reduction in meat imports. In 2013 import of meat and meat products reduced by 9.68% whereas in 2014 an impressive reduction of 39.7% was achieved over the previous year. The decrease in meat imported is reflected in the drastic reduction in meat available for consumption by up to 39.6%.

Fish Production

• Inland Fish Production

• Production of Cultured Fish

Forestry

Export of Non-Traditional Agricultural Commodities

Investing in Ghana's Health Sector

Investment opportunities available in the health sector are in:

• Hospitals and clinics • Health Centers • Maternity Homes • Laboratories • Chemical shops • Hospital equipment • Research and development facilities • Drugs and pharmaceuticals • Preventive products e.g. condoms, mosquito nets

Infrastructure and Resources

All regional capitals and most districts have hospitals, polyclinics, clinics and health care centers. Three teaching hospitals in Accra, Kumasi and Tamale have facilities for treating special cases. Additionally, a number of religious organisations and private medical practitioners operate hospitals and clinics all over the country. Herbal medicine and psychic healing are also generally practiced, while a special government Herbal Medicine Hospital and Research Centre exists at Akwapim-Mampong.

Table 1

Health Professional Density in the public sector in Ghana for year 2016

Indicator 2016 Performance Medical Officers 3,016 Pharmacists 2048 General Nurses 14,778 Midwives 4,763 Community Health Nurses 13,659 Medical Assistant 1,215

4.5 INVESTING IN GHANA'S HEALTH SECTOR

SECTOR OVERVIEW

The health industry comprises all firms directly involved in the production and promotion of health care. These include all firms (both public and private) operating in the health market and are involved in the manufacturing of health products, provision of health care, health enhancing services and generation of knowledge in support of health.

The health industry as a new concept has not been recognised and analysed. The capacity of the local manufacturing industry is under-utilized and the potential of Ghana’s herbal and traditional medicines is largely untapped. The role of this industry in wealth creation is in sustaining health services and creating jobs. The overall aim of the health sector is to promote healthy lifestyles and reduce risk factors that arise from environmental, economic, social and behavioural causes.

A major prerequisite for a healthy population is how individuals, families and communities take care of themselves and the environment. Information with the specific aim of empowering people to make the right choice for healthy living has been seen as critical. The main disease burden of the country demonstrates a preponderance of diseases resulting from neglect of basic environmental practices and changes in dietary habits, physical activities and adoption of life threatening behaviour.

The structure of Ghana’s health industry consists of the following:

• Health Services • Communicable Disease Control • Non-Communicable Disease Control • Reproductive and Sexual Health • Nutrition • Accident and Emergency Services • Clinical Care • Traditional and Alternative Medicine Practice • Rehabilitation

The national health vision is to attain middle income status with 1481 USD per capita by the year 2016 by creating wealth through health.

INVESTMENT OPPORTUNITIES

Investment opportunities available in the health sector are in:

POTENTIAL SOURCES OF FUNDING

Viable companies and projects can easily attract financing both on the local and international financial markets. The main sources of funding are as follows:-

• Banks (Including Liaison Banks) • Non-Bank Financial Institutions • Rural and Community Banks

• Forex Bureaux

• The Ghana Stock Exchange – note that in the last four years, many issues of shares on the GSE have been oversubscribed by 100% - 300%, meaning that there is a lot of money for investment purposes • Ghana Venture Capital Fund • International development finance institutions based in Ghana, such as the International Finance Corporation (IFC) and the African Development Bank (AfDB)

A number of foreign financial institutions also provide off-shore financing directly to companies in Ghana.

GHANA’S COMPETITIVE ADVANTAGE

Ghana is one of the most attractive locations in Africa to invest and do business in. To make the Ghanaian environment more business friendly, there are efforts to reduce the occupancy costs for commercial and industrial properties and the general cost of doing business in the country.

The Ghana Investment Advisory Council (GIAC), which was established with the help of the World Bank, helps shape government policy aimed at creating an enabling investment environment. The GIAC consists of multinational and local companies and institutional observers - International Monetary Fund (IMF), World Bank (WB), and United Nations Development Programme (UNDP).

Also, there is a liberal investment environment in Ghana that offers a number of special benefits such as foreign investor ownership of local companies, participation in joint ventures with the minimum required equity of $200,000 and companies wholly-owned by non-Ghanaians at $500,000.

The other factors that make Ghana a favourable place for investors in Africa and among developing countries in general, include the following:

1. Stable Political Environment

Ghana is a politically stable country. This is recognized with former leaders such as US President George Bush and British Prime Minister Tony Blair who have expressed appreciation for the political stability in Ghana.

2. Macro-economic Policies

The Government of Ghana has initiated a number of sound macroeconomic policies designed to accelerate the process of growth and transformation of the economy under competitive conditions. The rate of inflation is hovering around 15.8% as at November 2016, in the face of record prices of crude oil in the world market and acute shortage of cereals. The management and access to foreign exchange in Ghana continues to improve.

3. Foreign Ownership

In the on-going privatization program, hundred per cent (100%) foreign ownership is permitted.

4. Access to ECOWAS Market

Ghana is easily accessible to the markets of all the member states of the Economic Community of West Africa (ECOWAS) with its population of approximately 250 million people.

5. Good Physical Infrastructure

Ghana possesses well developed seaports, airports and road networks capable of meeting the needs of business in the 21st century. There is an effort to upgrade the rail network to make it easy to get to the ports from the inlands. Telecommunication facilities in Ghana are excellent with more private service providers offering telephone, internet and other telecommunication services. Basic utilities such as water and electricity are readily available at relatively cheap rate.

6. Excellent Labour Force

The country has some of the best teachers, lecturers and researchers in the continent, who have excelled not only in Ghana but in the African continent and other parts of the world. There is also a large human resource base of both skilled and unskilled labour which can be sourced at competitive rates.

7. Access to International Markets

Ghana has easy access to the USA and European Union Markets. The flight time to almost all European Union countries is about 6 hours and 9 hours to the USA.

8. Availability of Fund Sources

Ghana has a large number of fast developing financial institutions available to raise long- term capital at competitive rates. These institutions include banks, insurance and venture capital companies and a stock exchange market (Ghana Stock Exchange).

9. High Safety Standard

There are high standards of health and safety measures in the country.

10. Warm and Friendly People

Ghana is internationally acclaimed for her hospitality to her investors and foreigners as a whole.

11. High Quality of Life

The quality of life of Ghanaians is fairly high.

12. Availability of Land

Ghana has a wide expanse of land around the country that can be acquired with little difficulty through appropriate agencies and owners.

1.6 INVESTING IN GHANA'S PETROLEUM SERVICE SECTOR

SECTOR OVERVIEW

Ghana is an emerging oil and gas producer with enormous potential and with over 5 years of commercial production since December, 2010.

The first significant deepwater discovery for Ghana’s Oil and Gas sector was in 2007. A consortium of companies comprising Kosmos Energy Ghana (Kosmos), Tullow Ghana Limited (Tullow), Anardarko Petroleum Corporation, Sabre Oil and Gas Limited, E.O. Group in conjunction with the GNPC announced discoveries of significant quantities of oil and gas in the offshore deepwater Tano/Cape Three Points basins located in the southernmost part of Ghana.

Under this circumstance, the Petroleum Law required that the discovered oil and gas resources in the two blocks be produced as one unit to reduce cost and optimize the recovery of oil and gas in the field. The two discovered fields were therefore unitized and designated as the Jubilee Field, in commemoration of Ghana’s Jubilee Year celebration.

There are four (4) major oil and gas fields in the country namely: the producing Jubilee field, the sub-commercial producing Saltpond field, the Tweneboa-Enyenra-Ntomme (TEN) field and Sankofa-Gye-Nyame fields. In addition to this, twenty-three (23) post Jubilee discoveries (between 2008 and 2014) have been made offshore Ghana on six different blocks in the Tano/Cape three points basin which have resulted in over 80% exploration success rate.

SUB- SECTORS

The petroleum industry comprises mainly of the upstream and downstream sectors and these encompass the process of exploration, production, refining, transporting and marketing of petroleum products. The upstream sector, regarded as a high risk, high reward and high investment sector, identifies deposits, drills wells and recover raw materials from underground. The sector includes areas such as rig operations, feasibility studies, machinery rental and extraction of chemical supply. Downstream sector, also regarded as a low risk, low reward and low investment sector, comprises of operations such as refineries and

marketing. These operations turn crude oil into usable products such as gasoline, fuel oils and petroleum-based products. Marketing services help move the finished products from energy companies to retailer or end users.

There is also the midstream sector which links the upstream and the downstream entities. These mostly include resource transportation and storage, such as pipelines and gathering systems.

The broad objectives of the upstream and downstream sectors for Ghana’s oil and gas industry are:

• Upstream Objectives: To ensure the effective management of the oil and gas resources of Ghana and also accelerate exploitation of the development of new hydrocarbon resources for the overall benefit and welfare of all Ghanaians. • Downstream objectives: To rehabilitate and expand petroleum refining, storage, distribution and marketing infrastructure, ensure fair distribution of petroleum products to all parts of the country and reduce heavy burden of oil imports on the country’s economy by accelerating the exploitation of indigenous resources.

SECTOR COMPOSITION

Figure 1 below gives a pictorial view of the composition of players in Ghana’s Oil and Gas sector and a brief on these entities is explained below.

Figure 1: The Petroleum Industry Structure

• The Ministry of Energy is the entity that provides policy direction for Ghana Petroleum Industry by formulating policies, and monitoring and evaluating. • The Petroleum Commission (PC), Energy Commission and the National Petroleum Authority (NPA) provide the regulations for the industry. • Petroleum Commission is mandated by the Petroleum Commission Act, 2011 (Act 821), to regulate, manage and co-ordinate all activities in the upstream petroleum industry for the benefit and welfare of all Ghanaians. • National Petroleum Authority (NPA), established by NPA Act 2005, ACT 691, ensures that the downstream sector of the petroleum industry remains efficient, profitable, and fair and at the same time, ensures that consumers receive value for money. • Energy Commission and Public Utilities Regulatory Commission regulates the midstream oil and gas sector. • There are a host of players in the industry and these include the IOCs, GNPC (GNPC Explorco, GNPC Tradco), Ghana National Gas Company, Tema Oil Refinery (TOR), BOST and Licensed Bulk Distribution Companies, a host of licensed oil marketing companies, petroleum entities and bulk distribution firms, Environmental Protection Agency (EPA), Maritime Authority, Ghana Navy and other Security Services.

The main agencies of the Oil and Gas sector in Ghana are:

• The Ghana National Petroleum Corporation (GNPC) is Ghana’s National Oil Company (NOC), established in 1983 by PNDC Law 64 as a commercial strategic vehicle for state participation in the oil and gas industry. It was to support the government's

objective of providing adequate and reliable supply of petroleum products and reducing the country's dependence on crude oil imports, through the development of the country’s own petroleum resources. The objects of GNPC as enshrined in section 2 (1) of PNDC Law 64 are “to undertake the exploration, development, production and disposal of petroleum”. The Petroleum [Exploration and Production] Law, 1984, PNDC Law 84, was subsequently enacted to provide the regulatory framework for the exploitation of the country’s hydrocarbon resources. PNDC Law 84 establishes the contractual relationship among the state, GNPC and prospective investors in upstream petroleum operations. This law also grants GNPC the right of entry into any open acreage to undertake exploration activities. • Tema Oil Refinery (TOR) has been refining crude oil into petroleum products for the past 50 years and continues to produce quality petroleum products for the Ghanaian market. TOR Limited refines and distills many forms of petroleum products including Liquefied Petroleum Gas (LPG), Gasoline (Petrol), Kerosene, Aviation Turbine Kerosene (Jet A1), Gas Oil (Diesel), Premix, Naphtha, Fuel Oil and Cracked Fuels. It is the premier and only refinery in Ghana. The refinery was among the first eight refineries in Africa as at 1963. Our refinery is a 45,000 barrel per stream day (bpsd) capacity Crude Distillation Unit and supplies this quantity out of the national demand of 65,000 bpsd. • Bulk Oil Storage and Transportation (BOST) Company Limited was incorporated in December 1993 as a private limited liability company with the Government of Ghana as the sole shareholder. Until May 2001, BOST was responsible for the distribution of refined petroleum products from its strategic depots located throughout the country. Additionally, BOST also holds the Natural Gas Transmission Utility License granted to it by the Ghana Energy Commission (EC) on December 19th, 2012. The NGTU as per EC Act 541, 1997, will provide transmission and interconnection services for natural gas without discrimination throughout the country. The transmission license given to BOST as per Natural Gas Licensing manual shall permit BOST: • To monitor and control the operation of the national interconnected network for the transmission of natural gas in areas within the country , and to ensure the safe, reliable and economic transportation of natural gas facilities connected to the transmission system • To provide transmission interconnection services without discrimination to other licensees in the natural gas industry; and • To provide transmission interconnection services to operators of natural gas networks in ECOWAS member states.

• Ghana Oil Company Limited (GOIL): GOIL was incorporated as a private limited liability company on June 14, 1960 as AGIP Ghana Company Limited with the objective of marketing petroleum products and related products particularly fuels, liquefied petroleum gas (LPG), lubricants, bitumen, and specialty products in Ghana. The shareholders were AGIP SPA of Italy and SNAM S.P.A. The Company’s main business is marketing and distribution of petroleum products in Ghana, one of the tenets of the New GOIL is to move beyond the current frontiers to marketing and distribution of energy products in general. Currently, GOIL’s technical partners are ENI SPA (AGIP) of Italy. • Ghana Gas Company Limited (GNGC): Ghana Gas is mandated to build, own and operate infrastructure required for the gathering, processing, transporting and marketing of natural gas resources in the country. • Ghana Cylinder Manufacturing Company (GCMC): GCMC was incorporated under the Companies Code 1963 (Act 179) as a private limited liability company on the 14th of May 1998.The major purpose for its establishment was to promote wider usage of LPG as a substitute for charcoal and firewood and thereby curtail some of our environmental challenges of degradation, deforestation and desertification caused by excessive use of firewood which accounted for over 71% of energy consumed in the domestic sector. The company began production in the year 1998. GCMC currently has a valid license from the National Petroleum Authority to retail Liquefied Petroleum Gas at its Premises.

THE OIL AND GAS SECTOR PLAYERS

Upstream industry is made up of a mix of Majors (ENI), Independents (Hess, Anadarko, Tullow, Kosmos etc), NOC (PetroSA) and Local Ghanaian companies: E&P and Service providers. Figure 2 below gives a list of the operators in exploration of Oil and Gas, with their investments made to date.

Figure 2a: List of operators in the exploration of oil and gas with investments made to date

Figure 2b: List of operators in the exploration of oil and gas with investments made to date

Figure 2c: List of operators in the exploration of oil and gas with investments made to date

Source: GNPC

Other players in the Upstream Sector

For a list of other players in the upstream sector, kindly see the website of the Petroleum Commission

Downstream sector players

For a list of players in the downstream sector, kindly see the website of the National Petroleum Authority

CURRENT TRENDS

Ghana’s oil and gas industry is growing at a steady pace, with a total proven reserve base as at August 2014 of approximately 883.4 million barrels of oil and 2,312.4 billion cubic feet of gas.

• Reserves:Total proven oil & gas reserves as at December, 2015 of 1,247.5MMboe • Ghana has over 36,000 km2 and 103,600 km2 of open offshore and onshore acreages

• Agreements: 15 Petroleum Agreements (PA's) currently in operation and about eight (8) new agreements under negotiation • Transparency • Ghana has been EITI compliant since 2010 • GNPC reports to the Public Interest and Accountability Committee (PIAC)

Currently, Ghana is a small hydrocarbons producer, but new output from TEN and Sankofa fields, as well as increasing production from the country's flagship Jubilee field will significantly boost Ghana's oil and gas production by 2020 as shown in table 1 below. Further upside potential comes from Ghana's active exploration scene offshore.

Table 1: Headline Forecasts (Ghana 2015 – 2021) 2015e 2016e 2017f 2018f 2019f 2020f 2021f Crude, NGPL & other liquids 1 121.0 152.6 175.8 222.6 243.9 243.6 238.7 produced, 000b/d Refined products 2 production, 9.0 11.7 15.0 18.0 21.6 22.9 24.2 000b/d Refined products 3 consumption and 82.1 83.8 85.5 88.9 92.4 96.2 100.2 ethanol, 000b/d Dry natural gas 4 1.8 1.8 1.9 2.0 2.2 2.9 3.8 production, bcm Dry natural gas 5 1.4 1.5 1.8 2.2 2.6 3.5 4.2 consumption, bcm 6 Brent, USD/bbl 53.60 45.13 57.00 60.00 64.00 67.00 67.00 e/f = BMI estimate/forecast. Source EIA, BMI

Source: Ghana Oil and Gas Report by BMI Research, published 1st April, 2017

The year 2016 marked another milestone in Ghana’s Petroleum Sector. The year witnessed the amendment of the country’s Exploration and Production law to bring it in line with

recent industry practices, enhance transparency and accountability and align it with recently passed laws that affect the sector’s fiscal regime. The FPSO for the TEN fields arrived in 2016 and production of crude oil from the field commenced in the same year, with the first oil in August, 2016. 2016 was also the year in which crude oil prices, output and revenue fell significantly short of their original projections, leading to expenditure realignments in the year.

Some key developments that affected the Petroleum sector

• The FPSO Atta Mills arrived on the shores of Ghana in February, 2016 to herald crude oil production on the TEN field • Jubilee field production is expected to average 66,202 bopd in 2017, assuming 12 weeks of shutdown associated with the initial phase remediation works • Implementation of OCTP milestones to facilitate the coming on stream of the Sankofa-Gye-Nyame (SGN) project • Ghana’s oil and gas industry continues to attract key global industry players on the back of sustained investor interest, as well as significant de-risking of the Western Basin. Some of the key players are that are currently party to agreements in Ghana include Tullow Plc, KOSMOS Energy, ENI, Lukoil, Hess, Anadarko, Petro S.A., AGM, Heritage, Blue Star and Cola Resources • Cabinet in 2016 also approved two significant policies: - the Gas Master Plan (GMP) and Strategy and the Reverse Flow to facilitate the interconnection of the Ghana Gas Transmission System with the West African Gas Pipeline (WAGP) System. GMP Strategy will provide infrastructure development priorities for the sustainable development of Ghana’s natural gas resources and security of energy supply in the medium-to-long term. The Reverse Flow will also facilitate the interconnection of the Ghana Gas Transmission System with WAGP System to enable the flow of excess indigenous gas from Takoradi to Tema.

• The Petroleum Commission drafted guidelines for research, development and operationalization of the Local Content Fund. • The Ghana National Petroleum Corporation is mandated to assume the role of gas off taker from the upstream partners and has been engaged in gas sales negotiations to derive the best price for gas on the domestic market. The organization has set up three operational subsidiaries as part of its accelerated growth strategy to enable it assume a leadership role in Ghana’s oil and gas industry:

• Ghana Trading Company (TRADCO) • GNPC-Technip Engineering Services (GTES) and • GNPC Exploration Company (Explorco): Explorco has acquired 33.3% of GNPC Operating Services Company Limited (GOSCO); operator in two Petroleum Agreements: Offshore South West Tano and East Keta. • The Ghana National Gas Company (GNGC) completed the commissioning of the Western Corridor Gas Infrastructure project in April 2015 when it entered into commercial operations. During the period of 2016 (January to December), 21,579.60MMscf of raw gas supplied by the Jubilee Partners was processed at the Atuabo Gas Processing Plant (GPP) and transported to the VRA for power generation.

KEY PETROLEUM PROJECTS

Jubilee Field

• Recoverable reserves of 466 million barrels and 465 billion cubic feet (bcf) of gas as at December, 2015 • Production from the Jubilee field for 2016 was 26,981,640 barrels, compared to 37,411,661 barrels for the same period in 2015; representing a decline of 27.9% • Annualized daily average production for 2016 was 73,720 barrels per day (bopd), down from 102,497 bopd for the same period in 2015 • The total production from inception to end of year 2016 is by the Jubilee field is 188,910,811 barrels • A total of 38,420 MMscf of associated gas was also produced in 2016. • The achieved average Jubilee oil price for January to December, 2016 was US$46.07 • The adjoining oil and gas discoveries of Teak and Mahogany will be developed together with the main Jubilee Field currently under production to form the Greater Jubilee Field.

Table 2 below gives a breakdown of annual production volumes from the Jubilee field

Table 2: The annual production from the Jubilee Field from 2010 to 2016

Tweneboa, Enyenra, Ntomme (TEN)

• Four (4) declared hydrocarbon discoveries (2009-2011) • Total of 12 wells drilled: 2 exploratory and 10 appraisal wells • Ten (10) separate hydrocarbon pools: five (5) oil and five (5) gas condensate • Total oil reserves: 239 million barrels (MMBO) and 360 billion cubic feet (BCF) of gas • First oil from TEN was achieved on 15th August 2016, producing and injecting from only ten (10) wells. • The field achieved annualized average daily production of 14,525 barrels per day at end of 2016, compared to an initial planned production of 23,092 barrels per day. • Total production from TEN field for 2016 was 5,316,140 barrels • The Ghana Group undertook one crude oil lifting from the TEN field in Dec 2016. The commodity was sold for US$51.09 per barrel • Associated gas produced from the TEN field at end – 2016 was 6,531 MMscf, of which 367 MMscf was re-injected. The remaining gas was utilized on the FPSO for power generation and flared due to FPSO commissioning operations. • The first associated and non-associated gas exports are scheduled for 12 and 24 months respectively, from first oil.

OCTP - Sankofa-Gye-Nyame (SGN) Project

• Phase-1 Oil: 8 oil producers; 3 water injectors; 3 gas injectors; spread-moored FPSO; Subsea tie-back in a daisy chain • Phase-2 development of NAG with oil • 5 gas producers (4 Sankofa main + 1 Gye-Nyame) • 63km - 22" OD Gas export pipeline • Reserves: 162 MMBO of oil with 1,071bcf of gas • The overall project progress of the SGN field at end – 2016 was 63%, against a target of 64.3% • Physical completion of the SGN FPSO was 94.8%, against a target of 96.2% • Work on the subsea production system was 85.6% complete, compared to the 88.6% target completion • First oil from the SGN fields will be in the third quarter of 2017 and production of first gas will be in the first quarter of 2018 • Annualized average crude oil production from the field is expected to be 7,214 bopd in 2017 • The field is estimated to hold 173 million barrels of oil and 1,071 bcf of gas • The FPSO sail away to Ghana is expected to take place in February 2017.

Voltaian Basin Project

• The Voltaian Basin is a huge inland sedimentary basin constituting almost 40% of Ghana's land mass • GNPC is pioneering exploration activities in the inland Voltaian basin under its 5- year initial exploration programme from 2015 - 2019 • The 5-year reconnaissance program will cover 2D seismic data acquisition and processing, environmental impact assessment, community relations management and drilling of 2 conventional wells

In 2016, the Voltaian Basin project completed the following tasks:

• Technical and financial evaluations of 2D Seismic Acquisition which are awaiting approval from Central Tender Review Committee • Seismic Data Processing contracting and • Explosives and Detonators Contracting

Saltpond Field Decommissioning Project

• The Saltpond Field Petroleum Agreement was terminated in 2016 • There was no production realized from the field in 2016 • GNPC is in the process of decommissioning the field.

Expected Volumes from Discovered Wells

Tables 3, 4 and 5 below provides the expected volumes of oil and gas from the discovered wells of Jubilee, TEN and Sankofa-Gye-Nyame from 2017 to 2021

Table 3: Jubilee Production Profile – 5 Years: Full Field Development Oil Production Gas Production (Excl Date (BBL/Day) Teak)(MSCF/Day) 2017 68,466 88,508 2018 93,407 123,235 2019 94,661 146,257 2020 96,516 152,000 2021 97,588 146,170

Table 4: TEN Production profile (5 years): Full Field Development Oil Production Gas Production Date (BBL/Day) (MSCF/Day) 2017 49,650 60,254 2018 54,705 51,750 2019 69,979 98,470 2020 68,303 98,946 2021 63,597 94,172

Table 5: Sankofa-Gye-Nyame Production Profile (5 years) Oil Production (Incl. Gas Production Date Condensate) (MSCF/Day) (BBL/Day) 2017 7,214 - 2018 35,441 158 2019 51,932 171 2020 51,700 171 2021 51,232 171

PETROLEUM RECEIPTS AND UTILIZATION IN 2016

• According to the fiscal regime of the petroleum agreements, government is entitled to a royalty on gross production of 5% for Jubilee and TEN. The petroleum agreements also grant Ghana carried and participating interests of approximately 13.64% and 15% in the Jubilee and TEN fields, respectively. • Corporate Income Tax on upstream and midstream petroleum companies for 2016 was 35% • The receipt of the proceeds from these and other sources of petroleum revenue is regulated by the PRMA. The PRMA establishes the PHF as a designated Public Fund to receive all petroleum receipts as defined in the law and provides framework for the collection, allocation and management of the petroleum funds. • In 2016, GNPC lifted six parcels of crude oil (i.e. 31st to 35th Jubilee and 1st TEN on behalf of the state) and exported a total of 21,580 MMscf of gas to GNGC. Total crude oil lifted was 5,856,921 barrels of oil (4,860,462 barrels of Jubilee oil and 996,459 barrels of TEN oil), compared to 5,730,090 barrels in 2015. Total petroleum receipts (i.e. proceeds from Jubilee liftings and other petroleum receipts) as at end of 2016 was US$247.18 million as shown in the table below. This compares with the 2015 receipts of US$396.17 million. Table 6 below gives a breakdown of the Crude Oil proceeds on Lifting Basis for 2016.

Table 6: Crude Oil proceeds on Lifting Basis for 2016

Source: 2016 Annual report on Petroleum Fund by the Ministry of Finance

GOVERNMENT'S POLICY DIRECTION

Medium-Term Policies and Strategies for the Development of the Oil and Gas Industry

In the medium-term, the development of the oil and gas sub-sector will be a major factor to the transformation of the economy. The transformation agenda will be driven by the following priorities: oil and gas industry development and its effective linkage to the rest of the economy; strengthening of the regulatory regime with the passage of relevant laws including the Petroleum Production and Exploration law; local content development; employment creation; protection of the environment; and transparency in revenue management.

Oil and Gas Industry Development and its linkage to the rest of the Economy

The oil and gas industry can deliver a transformation dividend to the economy if its development is linked to other sectors of the economy. In the medium-term, the implementation of the priority interventions aims at

• ensuring that natural gas finds are prioritized first for electricity generation and following that, for domestic industrial value creation • using opportunities arising from the oil and gas endowment as a catalyst for diversifying the economy especially the agriculture and industrial sectors • accelerating development of complementary resources such as salt to trigger development of a petrochemical industry • strengthening institutional capacity of national agencies to take leadership role in managing Ghana’s oil and gas resources; and

• promoting the re-development of existing settlements with provision of physical and social infrastructure as part of the growth of the new urban settlements that will spring up in the wake of the development of oil and gas industry.

The development of the oil and gas industry is expected to reverse the country’s overreliance on the exports of primary products by ensuring value addition in the industry and effective linkages across the sector. The priority strategies to be implemented include

• ensuring value addition to local goods and services to maximize their use in oil and gas industry • promoting the establishment of petroleum and gas-based industries and other industries that depend on the utilization of the by-products of oil and gas industry • expanding the national oil and gas upstream, midstream and downstream infrastructure in collaboration with the private sector within the PPP framework • accelerating development of complementary resources such as salt; and leveraging the oil and gas industry to support the development of new industries such as petrochemicals, aluminum, glass, brick and tiles, etc. • There is inadequate human capacity for the exploitation, development and production of oil and gas in the country. To bridge this gap, resources from the oil and gas industry will be applied to support capacity development at all levels in the country’s technical, vocational and tertiary institutions.

Local Content Development

To ensure local content and participation across the oil and gas value chain, Ghanaian enterprises will be supported in the exploration, development, and production of oil and gas, to go hand-in-hand with dedicated efforts to expand and strengthen the capacity of Ghanaians to participate in all segments of the industry. In addition, impetus will be given to the effective implementation of the Local Content Law. In the process, SME incubation centres will be developed for the oil and gas industry and supported to facilitate the growth of local companies operating in the industry.

Employment Creation

In the medium-term priority strategies will focus on leveraging the opportunities offered by the oil and gas industry for accelerated jobs creation, especially for the youth. The strategies to be implemented will include: fully implement the Local Content and Participation Law;

ensure that companies and other players in the industry comply with prevailing regulations in labor recruitment for all opportunities for which there is available Ghanaian talent; and continue to take special precautions to protect young boys and girls against exploitation.

Protection of the Environment

Government will strengthen emergency preparedness to manage disasters in the oil and gas industry. Another strategy to achieve the policy objective is to strengthen the Exploration and Production Law to maximize national benefits and minimize environmental cost of the industry. Government will continue to manage Ghana’s oil and gas resource endowments to ensure sustainability by optimizing resource exploitation whilst increasing the nation’s total z reserves by accelerating the pace of exploration in other sedimentary basins.

Transparency in Revenue Management

The capacities of new and existing revenue collection and management institutions will be strengthened to address the peculiar needs of the oil and gas industry. Moreover, monitoring, evaluation and reporting systems in the oil and gas industry will be given special attention.

Priority interventions for the Development of the Oil and Gas industry

Government will prioritize some strategic initiatives such as:

• Effective alignment of operational mandates of key sector operators including GNPC, GNGC, BOST, NPA, Petroleum Commission, and Energy Commission within a coherent sector regulatory framework; and • The construction of a new deep sea port with dedicated oil and gas services terminal, shore base and fabrication centre.

Source: GSGDA II by the National Development Planning Commission

SECTORAL DEVELOPMENTS

Developments in Exploration and other Petroleum Activities

Since the Jubilee discovery in 2007, additional discoveries have been made. Table 7 below presents the status of discoveries at various stages of appraisal, development and production.

Table 7: Discoveries at various stages of appraisal, development and production

Source: GNPC

Expected Developments

Policy frameworks, institutional measures and civil society monitoring are playing important roles in ensuring that the benefits of Ghana’s oil revenues are grafted in sustainable and inclusive growth.

As a consequence, transparency in revenue management remains one of the key policy objectives for the oil and gas sector. For the first half of 2016, a total revenue of US$ 126.4m was earned, from which US$22.7m was allocated to the Ghana National Petroleum Corporation (18%), US$13.5m to Ghana Stabilization Fund (11%), US$64.4m to annual budget funding amount (51%), and US$5.8m to Ghana Heritage Fund (4.6%). ABFA funding is the percentage of petroleum revenues allocated to national budgets to support development financing, specifically financing of infrastructural projects within the oil and gas sector. It is for this reason that 71% of ABFA funds went into roads and other infrastructure followed by capacity building (22%) and agriculture (6%).

Another important policy objective is interventions to build the capacity of Ghanaians to participate in all segments of the oil and gas industry. This was established in the 2013 petroleum (local content and local participation) regulations (L.I 2204). This regulation requires a contractor, subcontractor, license, the Corporation or other allied entity carrying out a petroleum activity to ensure that “local content is a component of the petroleum activities engaged in.” According to the Petroleum Commission (2015), nearly all the 85 of the 415 registered companies which submitted their local content report met this requirement. The percentage and number of Ghanaians employed in the sector in addition to number of Ghanaians in management, technical and other positions in the industry are among critical indicators for local participation. An estimated 413 Ghanaians are employed by the 32 major oil companies in Ghana – 10% in management positions, 56% in technical positions and 34% in other positions. Unavailable is empirical data on whether the Ghanaians in these positions are receiving work benefits equivalent to their foreign counterparts.

This grueling history of oil spillage makes concerns for human and aquatic habitability of the world in the face of petroleum activities, well grounded. The oil and gas industry in Ghana is required to operate in consistency with international standards on environmental sustainability. The Environmental Protection Agency (EPA) audits activities at the jubilee field to examine compliance with conditions and standards set out in the environmental

management plans (EMP) permit. The 2015 audit showed 95% compliance, marginally short of the 100% target.

Budgetary

According to the Minister for Finance, the total petroleum receipts for 2016 recorded US$247,175 million as compared to the 2016 budget estimate of US$348.42 million, leaving a variance of US$101,241 million dollars. The total ABFA receipts in 2016 amounted to GHȻ388.85 million, with actual utilization amounting to GHȻ311.12 million, leaving an unutilized balance of GH¢77.73 million in the Petroleum Holding Fund.

Due to the emerging nature of the industry, opportunities exist in virtually every area of the petroleum industry, both upstream and downstream.

• Areas of Cooperation and Investment - Exploration & Production

Source: GNPC

1.7 INVESTING IN GHANA'S TOURISM SECTOR

Sector overview

Ghana’s Tourism Sector is one of the fastest growing sectors in the country. In 2016, it was the fourth highest forex earner for Ghana. The sector employed about 125,000 people directly and a further 313,000 indirectly in 2016.

Tourist arrivals continue to increase in Ghana, hitting 1.2 million in 2016. Visits of friends and relatives (VFR) tops at 24.7% whilst business visits stand at 23%. 19% of all visitors to Ghana in 2016 came for holiday. On the tourism expenditure side, 29% of all expenditure by tourists go into accommodation whereas food and beverages take 14%.

The USA, UK, Germany, France and the Netherlands are the top five tourism sources for tourists visiting Ghana.

SECTOR COMPOSITION

There are many sectors & players in the tourism sector in Ghana. The Ghana Tourism Federation (GHATOFF) which is the private sector umbrella body for tourism organizations in Ghana has 25 organizations under its umbrella. These organizations include the Ghana Hotels’ Association; Ghana Association of Travel & Tours; Tour Operators Union; Association of Night Clubs and the Tourism Writer’s Foundation.

In the hotel’s sub-sector, the Ghana Tourism Authority (GTA), which is the government body mandated to regulate the industry estimates that there are about 2,800 hotels registered across the various categories in Ghana. Of this number, occupancy is highest in the 3 and 4-star category, with about 72% occupancy whereas the 5-star category has occupancy of about 68%.

Whilst GHATOF is a federation of players in the tourism industry, GTA is the government agency tasked to regulate the industry.

ALLIED SERVICES/ RELATED SECTORS

Tourism has overlapping relationship with almost every sector of the economy.

i. Agriculture: The linkage between tourism and agriculture is direct. The average tourist in Ghana spends 7 days during which food forms an important part of this stay. The produce from agriculture is used to stock hotels and restaurants where tourists eat. Government policy is to focus on gastronomy in the tourism space, giving Ghanaian gastronomers the space to grow and ultimately expand Ghanaian gastronomy abroad.

ii. Agro-processing/ manufacturing: Closely linked with agriculture is agro-processing and manufacturing. Finished and semi-finished processed foods are used in the tourism industry to meet the many needs of tourists. iii. Infrastructure (Ports & Railways): It is estimated that about 75% of all tourist arrivals into Ghana is through the Kotoka International Airport (KIA), with the rest coming in through mainly the three border towns of Aflao, Elubo and Paga. Also, tourist on cruise ships and chartered boats visit Ghana from time to time. The KIA serves as a first port of call for tourists. It is in this line, and the increasing number of visitors through the KIA that the government is undertaking the construction of the Terminal 3 at the KIA to have boarding bridges and expanded facilities. Already, the existing facilities at Terminal 2 has been expanded. There have also be recent upgrades of the 3 existing domestic airports at Takoradi, Kumasi and Tamale. These domestic airports have increased the number of tourists that visit attractions across the country as it opened-up the country. Plans are underway to turn the Kumasi Airport into an international airport. Ghana’s port infrastructure has also seen expansions with a dedicated berth being designed for cruise ships and floating hospitals. iv. Roads & Transportation: Roads and Transportation is another sector that the tourism sector has a direct relationship with. Often, tourists need ground transportation to get to the various tourist sites. Government has embarked on a plan to improve the road networks leading to tourist sites. Also, many more private investments are being sought into providing tourist serviced buses for designated routes. v. Health & Education: Both health and education has direct bearing on tourism, with a lot of travelers now opting for educational or health tourism directly.

GOVERNMENT’S POLICY DIRECTION

The policy direction of government is to encourage more investments into community based eco-tourism facilities.

In its 2017 budget to the Parliament of Ghana, the government stated that the Mole National Park, the Accra Eco-Park, the Shai-Hills Resource Reserve and the Kakum National Park will be the focus of government by fully exploring the tourism potential of these sites and developing them.

There is also the drive to attract international brands in the hospitality industry by making such companies assess the full available incentives and exemptions that they can benefit from.

Ghana’s Tourism Policy states that the type of tourism to be promoted shall be non-mass and shall focus on that which shall respect and conserve the natural, cultural, historical, ecological and environmental heritage.

The following will be focused on:

1. Culture tourism with focus on festivals, events, rural tourism.

2. Heritage tourism with focus on the slave route. 3. Recreational tourism focusing on beach, golf and theme parks. 4. Adventure tourism with focus on rainforest eco-tourism; game parks; whitewater rafting etc. 5. Events tourism with focus on conferences.

SECTORAL DEVELOPMENTS

The government, in its 2017 budget statement to the Parliament of Ghana, noted the development of a 240-acre marine drive project as one of the focus of government for 2017. The land, stretches on the coastline of Osu, Accra and is intended to incorporate into the development, residential facilities, offices, schools, hotels, retail spaces as well as recreational establishments.

Also top of government agenda is the development of the Afua Sutherland Children’s Park in Accra, which needs renovation.

INVESTMENT INCENTIVES/ GUARANTEES/ EXEMPTIONS

There are generous incentives specifically for this sector. Goods imported by Hotels and Restaurants (including fast food chains with a seating capacity of thirty or more persons) under GIPC Act, 2013 (Act 865) are admissible at 10% concessionary duty rate. The items considered which should be in the appropriate quantities (relating to size, number of rooms, seating capacity etc.) are as follows: Refrigerators/deep freezers, Television sets, Air-conditioners, Public Address Systems, Furnishing( including carpets, bedding and fixtures), Fans, Radio sets and Crockery.

Ghana is a safe investment destination. Guarantees against expropriation of private investments provided under law are buttressed by the Ghanaian Constitution. Some investment guarantees are detailed below:

1. Free transferability of capital, profits and dividends 2. Insurance against non-commercial risks – Ghana is a signatory to the World Bank’s Multilateral Investment Guarantee Agency (MIGA) Convention 3. Double Taxation Agreements (DTAs) – to rationalize tax obligations of investors in order to prevent double taxation. 11 DTAs have been entered into by Ghana with 9 of those ratified by the respective parliaments and the 2 yet to be ratified. A further 5 agreements are in various stages of negotiation and as such, are yet to be signed. 4. There are also general incentives which provide for automatic incentives and benefits including income tax incentives.

GLOBAL IDEAS/PLAYERS/ TRENDS

Globally, the trends that are shaping tourism for 2017 include the following, according to TreckSoft:

• Food Tourism

Food tourism has become the emerging trend among travelers everywhere. Many travelers consider it to be one of the best ways to get to know the story of the place they are traveling to. These experiences are closely tied to the culture of the location.

According to Skift UK Editor Patrick Whyte at TouRRoir 2016, food experiences are not limited to simply dining out. It includes cooking courses, farm tours and the classic food markets, which make up about 95% of these experiences.

Operators who are providing a food experience can benefit by ensuring it connects products with people and the traditions of a destination. With this in mind, every stage of the customer journey can be actively reinforced.

• Active & Adventure Trips

Active & Adventure travel is the number 2 trend in tourism for 2017 and include experiences such as “an African Safari, swimming with whales in Mexico or Austrailia or hiking the Swiss Alps”. Africa, North & South America are top destinations for customers. Adventure activities such as safari, hiking and cycling are expected to be the stand out choices for 2017.

• Millennials

Millennials are the youngest generation and also, officially the largest generation in history. They also lead in decision making. They are helping to decide what the major trends and tastes is and are not shy about getting exactly what they want, how they want it. When planning travel, Millennials are used to having their options conveniently available to them. They want to be able to research and book their trips and tours online.

Millennials are dictating the type and duration of tours and will continue to do so for the next few decades. Countries are beginning to suit their tours and attractions such that they can get the best of this segment of the market.

• Responsible Tourism

The UNWTO Secretary-General, Taleb Rifai is on record to have said that "2017 has been appointed The International Year of Sustainable Tourism by the UN “as a unique opportunity to advance the contribution of the tourism sector to the three pillars of sustainability – economic, social and environmental, while raising awareness of the true dimensions of a sector which is often undervalued”

Global campaigns have been set in place to promote more sustainable forms of travel and countries and industry professionals are beginning to see a shift in the mindset of travelers everywhere. They will be more interested in the environmental, economic and social impact they're making at the destination they visit and are likely to support companies that embody these values.

More travelers are aware of the impact their experiences have on the planet and as a result, are opting for more sustainable measures in their travels.

• Business & Leisure Travels

Business and leisure travel or (as it's affectionately known around here) "bleisure" is predicted to be a very lucrative trend for tour and activity providers in 2017 and some project that it will rise in popularity.

Bleisure has been presented as a rising trend for several years, but there is more data suggesting its static in the past five years than its rise. It would suggest that this isn't a new trend but rather, an observation of the latest traveler needs. For generations, people have been extending their business trips into leisure travel and this is expected to continue this year.

• Strength of the Chinese Market

The Chinese market for tour and activity companies is the fastest growing tourism source in the last decade; having spent a whooping US$498 billion in outbound tourism in 2015 alone. China has signed a series of Approved Destination Status (ADS) agreement with countries which allow for Chinese companies to organize tours for nationals for a period of up to 30 days.

These agreements has been a driving force for China’s outbound tourism, with usually, wealthy Chinese being part of the group. Across the globe, countries, states and provinces are taking advantage of this to bolster their tourist sites whilst providing local employment. There are guidelines on the execution of tours under the ADS scheme.

GHANA’S COMPETITIVE ADVANTAGE

Ghana is the closest landmark to the centre of the earth. The Greenwich meridian,(longitude 0) passes through the port city of Tema, about 15km from the city of Accra. The equator, (latitude 0) lies just 500km below Tema, making Tema.

What makes Ghana competitive include:

• Easy Accessibility to Ghana : Ghana’s accessibility has improved: airline seat availability has increased and airfares reduced as her “Gateway Programme” takes off to allow more airlines and cruise liners to use Ghana’s ports as “liberalized skies” and “free–ports” respectively. Requirements governing entry formalities have also been liberalized.

• Political and social advantage: The tourism industry in Ghana has good prospects because Ghana’s political and social stability remain favourable. • Uniqueness and Diversity of Products: Ghana’s product will not face stiff competition in the African region due to its uniqueness and diversity. Ghana rather stands the chance to win a share of the tourist traffic for adventure, leisure and sports as it is the newest destination in that special market. • Quality destination with good standard tourism product: For international tourism, Ghana is being developed as a ‘quality’ destination with a good standard of the tourism product (Tourist attractions, facilities, services and infrastructure) and promoting tourist markets that appreciate and respect Ghana’s history, culture and environment. • Inexpensive but trainable labour : Labor is of quality but inexpensive. The minimum labour wage is approximately GH¢8 (US$1.9) per day (as at January 2017). Educational and training institutions in the Travel and Tourism industry have sprung up over the last few years to train and improve the skills of personnel in the industry. • High patronage of airlines: Passenger loading figures are fairly high and most flights are full all year round, peaking during times overseas Ghanaians are returning home during holiday times.

Ghana also offers the following unique blend of advantages to potential investors:

• A demonstrated commitment to the philosophy and practice of market liberalization policies • Investor confidence in the country's economy as evidenced by major successful investments in most sectors of the economy • Availability of low-cost labour and a good supply of trained and trainable labour • Availability of a stock exchange and other emerging financial markets • Progressive institutional development as evidenced by the process of establishing export free zones and factory specific export processing zones for existing firms, as well as emerging bank and non-bank financial institutions • Ongoing donor and government support for infrastructure development electricity and water supplies, transport and communications • Quota-free access to United States of America and European Union markets • Strong private sector advocacy groups such as the Private Enterprise Foundation and the Private Sector Advisory Group • A strategic location for communication facilities in terms of international commerce • Warm and friendly people and a high degree of personal safety

GHANA’S UNIQUE ATTRACTION

Ghana, lying in the tropics has several unique attractions that make it appealing to continental and international visitors. Some of these attractions include:

• White sands coastline: Ghana has a coastline of 539 km of white, sandy beaches. The seas have long stretches without rocks making it ideal for surfing, swimming and other water sports. In

addition, the many rivers and lakes support water sport, with the tributary of the Volta River being a popular location for water sports in Ghana.

• Castles and Forts: Ghana has thirty-three (33) forts and castles dotted along the cost with a few located inland. Of this number, twenty-one (21) have been designated as UNESCO World Heritage sites. These castles and forts, mostly constructed between 1482 and 1786 were built and occupied at different times by traders from Portugal, Spain, Denmark, Sweden, Holland, Germany and Britain. They served the gold trade of European chartered companies. Later, they played a significant part in the developing slave trade, and therefore in the history of the Americas, and, subsequently, in the 19th century, in the suppression of that trade.

In July 2009, the then US President, Barack Obama visited the Cape Coast Castle, one of the biggest castle and also a focal point of the trans-atlantic slave trade. Visits to the castles and forts remain an integral part of attractions in Ghana.

• Eco-Tourism: Ghana boast of several eco-tourist sites across the country with over 28 community based eco-tourist sites. From the Buabeng Fiema Monkey Santuary through the Paga Crocodile Pond to the Wechiau Hippo sanctuary, there is always something for the traveler to do. Ghana has integrated the communities where these eco-tourist sites are located into the delivery of tourism service. The country sees this as part of sustainable tourism, which is the future of tourism.

• Cultural Tourism: Ghana has over 70 major festivals celebrated at different times throughout the country. The rich culture of Ghana can be seen through the colourful display of culture, be it the Akwesidae of the Ashanti Kingdom, the Deer Hunt Festival of the Effutu people or the Bugum festival of the Gonja people.

Ghana’s festival calendar is all year round, attracting people from across the globe. In 1992, Ghana introduced the Pan-African Festival (PANAFEST) for people of African origin in the diaspora connect with their roots, which they lost during the slave trade.T the idea of this festival is to promote and enhance unity, Pan-Africanism, and the development of the continent of Africa. This festival takes place every two years.

• Safari: Ghana boasts of wildlife safari in the National Parks. The Mole National Park, which is the biggest national park is located in Northern Ghana and has a variety of tropical animals. Summer safaris are popular among tourists in Ghana.

The increasing number of tourists and the evolving profile of today's traveler demand a host of new tourism offering and infrastructure projects. A wide spectrum of investment opportunities arise out of Ghana's long-term tourism plans

These include:

1. Tourist Accommodation

• Multi-hotel resorts; one each for the Volta Estuary; Accra and environs; Brenu beach in the Central Region; Cape Three Points area in the Western Region; Lake Bosumtwi in Ashanti, the Volta Lake Basin incorporating Dodi Island, Dwarf Island, Digya National Park, Melinli Peninsular, Amedzofe and Wli-falls in the Volta Region. • Single-hotel resorts at beach sites, botanic garden sites, other lake sites etc. • Mountain Resort • Business Hotels of all classes. • Lodges and Inns; desirable locations include eco-tourism sites (eco-lodges in National parks), as well as other isolated tourism attraction sties and towns. • Motels on major tourist routes. • Hostels particularly on or near university campuses for dual use by tourists and campus students. • Camping Sites for the trans-Saharan adventure tourists with Paga, Tamale, Kintampo Falls, Kumasi, Accra.

2. Motel and Highway Rest Stops

• Small Scale Rest Stop: this is a simple basic road-side stop with facilities for parking; washrooms; basic refreshment, etc. • Medium Scale Rest Stop: Fairly elaborate with facilities for parking, washrooms, cafeteria, shop, fuel and auto servicing.

3. Tourist Information Shops

These independent shops are in high demand in major tourist centres particularly Accra, Kumasi, Cape Coast/Elimina and border entry points

4. Tourist Transport Services

The under-listed services are required at major tourist locations:

• Tourist Taxi: This is highly inadequate; it may be operated by companies licensed by Ghana Tourist Board and registered to operate from specified bases namely hotels, airport and other transport terminals. • Air Taxi: This is also highly inadequate but there is growing demand for it by both business and holiday visitors requiring quick visits to locations outside Accra. • Car Hire: The growing tourist traffic is not being matched by investments in the various categories of road transport vehicles especially tourist coaches, tourist buses, limousines, and cross-country vehicles for trekking and safaris.

• Cruise Boats: The Volta Lake offers opportunity for the operation of various types of lake transportation for various leisure purposes such as cruise excursions or purely passenger service or for a more personalized recreation like fishing etc.

5. Tourist Travel Services

The growth of various types of tourism has created opportunities for investing in tourist handling services including:

• Tour Guiding Services: These involve setting up a company which employs a pool of tour guides for operators, conference organizers etc. • Tour Handler Services: This is a small-scale operation whose services may be hired by an in- coming tour operator to handle the ground logistics required by in-coming package tourists. • Tour Operations: This is a larger form of a tour landing outfit. In this case, the operator is required to own buses, coaches, and must have own tour packages. It requires substantial investment in office accommodation, equipment, staff outlay, considerable experience in airline and tourist travel operation as well as a substantial insurance cover. • Travel Agencies: This sector is almost choked with a mushroom of outfits but an enterprising new entrant can make it.

6. Tourism Financial Services

These services are in short supply and as the visitor traffic grows, there will be the need for more such services particularly:

• Credit Card Agents or Discount Houses to offer credit to pay bills at areas which do not accept credit cards. • Foreign Exchange Bureau: Though these are many, there is room for more. • Tourism Rental Services: There is a growing demand for the rental of catering, camping, picnic accessories as well as mobile telephone and toilets in Ghana, all in the service of travelers, event organizers etc.

7. Tourism Medical Services

There is growing demand for various types of health services for visitors notable among which are:

• Tourism health insurance companies • Ambulance service for tourists including the concept of the flying doctor to service remote tourist sites.

8. Food and Beverage Services

The following will be required to meet the growing demand:

• Street Taverns, Cafes and Food Counters specializing in local snacks as well as foreign snacks. • Pubs: these are inadequate, such as the likes of Hard Rock Café in the US. • Night Clubs which offer table service with floor or live shows. • Fast Food Restaurants: these are becoming popular and as we receive more American tourists, the demand for the likes of KFC and McDonalds become apparent, • Specialty Restaurants: especially African and Ghanaian cuisine restaurants which serve dinner are inadequate.

9. Entertainment

Accra and all major cities as well as tourist centres literally go to bed at sundown for few nightlife activities. There is growing demand for international class:

• Pubs • Discotheques • Night-clubs with live shows • Casinos • Amusement parks etc

10. Leisure & Sports

Though Ghana attracts large numbers of European, American, Asian and African tourists, they do not stay long because of lack of activity as Ghana’s tourist offer so far has been mainly sight-seeing featuring, festivals, monuments, game-viewing and nature walk. There is high demand from tourists for leisure and sporting activities to liven up their stay.

The following would greatly enhance tourists’ experiences:

• World-class golf courses for international tournaments • Marinas on our Atlantic Coast, inland lakes and big rivers for sport fishing, yachting, sailing, surfing etc. • Theme Parks to relieve boredom. • Sports centres in cities offering a wide range of indoor/outdoor activities.

11. Shopping

Surveys indicate that most visitors to Ghana return home with most of their pocket (spending) money because the country does not offer tempting shopping opportunities despite her wealth in products. The following are required:

• Souvenir shops • Supermarkets • Shopping arcades

• Shopping malls • Duty-free shops.

12. Meeting Facilities

Multipurpose convention / conference / Exhibition Centres and Halls with shopping Arcade

13. Education

Need for training centres, a greater use of e-learning channels and other more innovative and flexible ways of providing education and skills development in the Industry

BANKABLE PROJECTS

• Marine Drive Tourism Investment Project

This is a project intended to plan and develop 241 acres of land stretching from the Christianburg Castle in Osu to the Kwame Nkrumah Mausoleum.

When completed, the facility is expected to be the hub of tourism activities in Ghana with facilities for hotels, conferences and entertainment being prime on the property. There will also be residential and other commercial properties including offices and shopping malls. The project, when completed is expected to transform the city and also create employment opportunities for many youth.

Feasibility is done and the project is to commence in 2017.

• Establishment of a Tourism Hospitality Institute

The project aims to establish a hospitality centre of excellence in Miotso, Prampram in the Greater Accra Region of Ghana.

The project comprises of a hotel, a training school and a hostel. The hotel will be a 7-floor hotel with 90 rooms. A swimming pool, a gymnasium, a sauna, bar, business centres and a travel bureau are some of the facilities that will be present at the hotel.

The training school aims to offer Advanced Level Certificate Programs as well as Post-Graduate Diploma courses in hospitality management. The school will be housed in a five-story building with a student intake capacity of 260. There will be thirteen (13) classrooms, an amphitheatre, an administrative block, a library and cafeteria.

The hostel is meant to house the students of the hospitality training school. The hostel will be a 4- story facility for both students and lectures with the capacity to house a total of 300 residents.

The project is estimated at between US$30-US$50 million. Feasibility studies is underway.

• Establishments of Tourist Rest Stops

Three categories are required:

1. a) Small Scale Rest Stop: this is a simple basic road-side stop with facilities for parking; washrooms; basic refreshment, etc.

b) Medium Scale Rest Stop: Fairly elaborate with facilities for parking, washrooms, cafeteria, shop, fuel and auto servicing. The recommended Routes:

• Kumasi – Wa (3 small scale) • Accra-Abidjan (one large plus one medium and one small scale) • Accra-Lome (One large scale plus one small scale) • Accra-Kumasi-Tamale-Ouagadogou (3 large scale plus 3 medium plus a couple of small scale stops) • Accra-Adomi Bridge-Hohoe (One medium plus one small scale)

The Market

THE MARKET

Ghana's tourism industry is poised for sustained high performance in the coming decade. It is estimated that over 1,035,000 international tourist will arrive in Ghana in 2021 This estimate has however been revised as arrivals in 2011 stood at 1,080,220. Ghana is the top cultural destination in Africa, as she receives the largest number of tourists who visit Africa for cultural purposes ranking amongst the top 10 tourism destinations in Africa.

The percentage of international tourist arrivals by purpose in 2008 and 2009 are presented below.

International Arrivals by purpose of visit, 2008

International Arrivals by purpose of visit, 2009

Source: Ghana Tourist Board The international tourist arrivals in Ghana increased from 698,069 in 2008 to 802,779 in 2009 with the receipts for these periods as US$ 1,403.1 million and US$1,615.2 million respectively. The summary of arrivals at 30 tourists sites in 2009 totaled 514,835 and in 2008, total arrivals at 33 sites was 637,550.

In 2008 the United States of America, United Kingdom, Germany, Netherlands and France were the lead countries in terms of tourist arrival outside Africa. Nigeria, Cote D'Ivoire, Togo and South Africa top the list of tourist in Africa visiting Ghana.

Ghana embarked on the Harmonized Standards for Accommodation and catering establishments in the Sub-region (ECOWAS) Standards for the classification of its hotels in 2006. The operators have been assisted in implementing these standards by the Ghana Tourist Board (GTB). This standardization by the operators resulted in total number of 20,788 rooms and 26, 057 beds in 2007 from a total of 1,432 hotels registered.

The numbers of hotels in 2008 went up by 11.28% to 1,775 in 2009 which resulted in the increase in the number of rooms and beds by 6.7% and 7.1% respectively. The hotel establishment increase to 1,795 in 2010 with the corresponding number of rooms and beds as 28,058 and 34,288.

There is increasing evidence that Ghana is the preferred conference destination in Africa as more organizations choose Ghana for their conferences. Statistics also show that other West African nationals prefer to do business in Ghana, which is evidenced by the increasing number of airlines servicing the country.

Ghana has strong cultural and historic links with both the USA and Europe. To meet the needs of these markets, the country has developed targeted programmes and events some of which include:

• The Emancipation Day is an annual celebration of the freedom gained by Africans at home and abroad, after 400 years of slavery. The celebration which begins in the last week of July and climaxing on August 1st is the anniversary of the declaration of the emancipation of slaves. It is during this time of year when Ghana consolidates to commemorate and atone for the many lives lost to the African holocaust. Ghana's celebration of the event, the first on the African continent which began in 1998, is aimed at consistently developing a unique sense of unity, co-operation and understanding amongst Africans on the continent and in the Diaspora.

• The Unique Culture heritage (festivals, music and dance, unique art and folklore) and rich historical heritage (world heritage monuments, Pan Africanism, Etc.,).There is a renewed interest in traditional festivals and events. • The Hang and Paragliding Festival held in the Eastern Region of Ghana during the Easter Holidays. In 2007, the festival gained the participation of 26 international gliders, attracting 7000 people. The year 2010 saw the resuscitation of the event which equally attracted a huge number of international gliders.

• A Regatta is organized in Elmina, Central Region for fisher folk, creating an opportunity to develop domestic tourism

• The older parts of Accra will be redeveloped and beautified under the Old Accra 2015 strategy.

Source: GNPC

Upstream Petroleum Sector:

• Geophysical (Site surveys, seismic data acquisition, processing and interpretation) • Basin modeling • Geological Studies • Sedimentology • Geochemistry • Geochemical Studies • Geographical Studies • Equipment supply and/ or leasing (boats, barges, aircrafts, etc) • Supply of casings for boreholes

Drilling Products and Services:

• Land Drilling Rigs, Swamp Drilling Rigs, Petroleum Engineering & Consultancy Services • Offshore Drilling Rigs (jack-ups, semi-submersible rigs, submersible rigs etc) • Offshore Rig Towing Services, Rig Move/Positioning Services • Drilling Mud, Chemicals, Mud Logging & Mud Logging Services • Drilling Site Preparation, Well Control & Blow-out Prevention • Under-water Inspection, Sand Control, Fish & Fishing Tools

• Dry-dock facilities for offshore supply vessels, tugboats, & offshore rigs • Measurement While Drilling (MWD) & Logging While Drilling (LWD) Services • Casing & High-Pressure Pumping, Tubing Services, Tools & Cased-Hole Electrical Logging • Directional Drilling & Survey as well as Drilling & Work over • Surface & Bottom Hole Sampling & Tubing Conveyed Perforation (TCP) • Fluid Filtration, Solid Control and Laboratory & Pilling Services as well as PVT Analysis • Mechanical Wire line Services and Petro-physical & Reservoir Data Services • Coil Tubing & Electrical Line and Production Logging • Oil Field Waste Management, Jetty and Shore Support Services and Rig-less Work over Services • Well Production Testing, Wellhead Maintenance & Well Completion Services • Supply of drilling materials and equipment (drill bits, drill pipes, drill collars, cone bits etc)

Production Support Services:

• Wire line Services & Pipeline Laying/Inspection • Production Chemical Supplies & Management • Engineering Design, Procurement/Construction of production facilities • Corrosion Engineering & Environmental Engineering Services • Blow Out Central Services & Flow Line Construction • Oil Expand Terminal Design and Construction & Crude Oil Lifting • Fire Fighting system Design and installation & 2/3 Phase Meter Supplies • Supply & Maintenance of Safety Equipment • Gas Valve Supplies & Installation

Reservoir Engineering:

• Consultancy Services • Simulation • Economic Analysis • Complete Field Study

Down Stream Sector Business Opportunities (Marketing, Storage, Distribution, Transport, Refining):

• Technical Partnership • Field Development Contractor Financing • Gas utilization • Refineries maintenance • Pipeline/ Depots construction and maintenance • Petroleum Products haulage • Petroleum products marketing • Petrochemicals • Gas Development/conversion • Butanization project • Fertilizer plants • Vehicular fuels • Methanol / MTBE plants

Gas Sector Opportunities

• Production, transmission, distribution of Natural Gas –independent ownership • Natural Gas Liquids (NGLs) – these liquids have high market value and find application either in their raw state as solvents, feed stock (for production of various chemicals) and liquid fuel or fractionated into their components, viz.: LPG, Natural Gasoline etc • Natural Gas-Fired Equipment • Independent Power Plant (IPP) • Industrial market, commercial market and residential market • Domestic natural gas sales and distribution • Compressed natural gas as, (LNG) automotive fuel, Gas Liquids (NGL), Gas to Liquid Conversion (GTL), Methanol etc • Ammonia/fertilizer plants

The Market

There are currently over 400 list of registered service companies with permits in this sector. The services offered cover the broad range of oil field services and other general services such as accounting, auditing and legal. Details of the list could be accessed via Ghana Oil Watch

Petroleum Regulations In Ghana

The relevant laws governing oil and gas operations in Ghana are

• Petroleum Commission (Fees and Charges) Regulations 2015 • Constitution Of Ghana • Ghana Model Petroleum Agreement • Ghana National Petroleum Corporation Law 1983 • National Energy Policy • Petroleum Commission Act 2011 [Act 821] • Petroleum Exploration and Production Law 1984 PNDC Law 84 • Petroleum Income Tax PNDC 188 • Petroleum Revenue Management Act 815 - 2011

1.8 INVESTING IN GHANA'S UTILITIES SECTOR

SECTOR OVERVIEW

Ghana's utilities sector includes the Water, Sanitation and Electricity Sectors.

Ghana water sector is segmented into two parts and are identified as the Urban Water sector and Community Water sector.

The Urban Water sector comprises about 87 cities and towns where the national water utility- the Ghana Water Company Limited (GWCL) owns and manages water supply. The sector is under the dual authority of the Ministry of Water Resources, Works and Housing (MWRWH) and of the Ministry of Local Government, Rural Development and Environment (MLGRDE).

The Community Water sector deals with over 16,000 rural communities and some 287 small towns. Management of water supply is the responsibility of District Assemblies with facilitation and oversight role by the Community Water and Sanitation Agency (CWSA). Municipal assemblies and districts are responsible for investment, operation and maintenance of water and sanitation infrastructure within the community water sector.

The Environmental Sanitation Sub-Sector covers both liquid and solid waste management and disposal. The institutional framework places the overall responsibility of environmental sanitation with the MLGRDE.

The Government's policy on urban water supply aims to rationalize the urban water sector to promote and improve the delivery of water services in terms of economy, efficiency, effectiveness and satisfaction. The long-term goals of the policy are generally directed at providing the entire country with potable water by the year 2020 with emphasis on the payment of adequate tariffs by consumers to ensure full cost recovery and to provide adequate revenue for operations and maintenance and replacement of the systems. Private sector participation is a key element in the operations and management of urban water supply.

The electricity sector involves the generation, transmission and distribution of electrical energy for industrial, commercial and domestic use in Ghana. In Ghana electricity is run by two utility companies; the Volta River Authority (VRA), Electricity Company of Ghana (ECG) and Ghana Grid Company (GRIDCO).

The utility sector in Ghana has been subjected to structural reforms at various periods. The different reforms took the form of restructuring, commercialization, competition and privatization.

Water

The water supply and sanitation infrastructure is insufficient, especially in rural areas. Major investments are needed to extend coverage as well as rehabilitate and maintain existing infrastructure. Companies are invited to provide the following options for water supply and sanitation: • Point Sources (boreholes/hand-dug wells) • Small Towns Pipe Schemes • Rain Harvest Plants • Household/Institutional Latrines In addition, investments are needed for construction of physical facilities to achieve: • network expansion to poor areas • increased reliability of water supply to poor areas to reduce reliance on water vendors Also, companies are needed to provide water tanker services to consumers.

Electricity

Companies are needed to provide the following: • Street lighting • Improved coverage/access • Service efficiency • Companies to supply energy-monitoring equipment to better meet the increased requests for power monitoring and tariff analysis from industry in the country. • Companies to provide an alternative decentralized sustainable energy system that can easily be deployed in remote and deprived communities into the overall national energy mix. • Companies to provide solar vaccine refrigerators for the preservation of vaccines for child immunization programmes in remote and off-grid parts of the country. • Provision of solar energy systems to schools in off-grid communities. • New, higher quality and cost competitive energy services to the poor, for cooking, transport, water heating and other home appliances.

The Market

In Ghana, electricity accounts for about 9% of the total energy consumption. Energy consumption of Ghana is estimated at 6.6million TOE. Household electricity consumption is primarily for lighting and in some cases for cooking. Exports of electricity in 2010 amounted to US $119.56 million. The volume of electricity in million of kilowatt-hours exported in 2010 was 1,002.51.In 2011 and 2012 the value of electricity exported amounted to US$66,105,797.55 and 50,865,042.14 respectively. ( See Table 1).

Table 1

Ghana: Value, Volume and Unit Price of Electricity Exports in 2010, 2011 and 2012. (In millions of US dollars, unless otherwise specified)

2010 2011 2012 Value 119.56 66,105,797.55 50,865,042.14 Volume (millions of 1,002.51 691.84 611.54 kilowatt-hours) Unit value (US’ 0.12 0.0956 0.0832 000/kilowatt-hour)

Table 2

Sectoral Electricity Consumption in GWh 2005 - 2010

2005 2006 2007 2008 2009 2010 Household 1,957 2,080 1,855.62 2,033.24 2,202.32 2,436.69 Commercial 746. 9 841 702.21 781.40 754.45 819.94 2,542. Industry 3592 1,351.25 1,501.16 1,518.63 1,703.80 6 TOTAL 5,247 6,513 3,909.09 4,315.81 4,475.40 4,960.42 Total System 1,418 1,425 1,236.48 1,483.45 1576.53 1,810.64 Losses

Approximately 10.3 million people (51%) have access to improved water supplies in Ghana. For the 8.4 million residents in the country's urban areas this increases slightly to 61% with two thirds of these or 40% of the total urban population covered by GWCL's networks.

With GWCL's unaccounted-for water (UFW) at about 50% of total output, the volume of water that is effectively sold (280,000 m3/day) is less than half of the daily demand (763,300 m3).