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Ghana Food and Drink Report Q4 2011
Business Monitor International, Oct 2011, Pages: 48
Business Monitor International's Ghana Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Ghana's food and drink industry.
Following the release of Q111 data, BMI has revised up its 2011 real GDP growth forecast for Ghana to 15.1% from 14.0% previously. The ongoing global headwinds, particularly the poor outlook for growth in the US and sovereign debt concerns in the eurozone, pose downside risks to Ghana’s growth trajectory. However, an oil boom is almost guaranteed, as production has already been ramped up.
Additionally, Ghana’s relative resilience during the global financial crisis (real GDP growth stood at 4.0%) bodes well for the nation weathering the storm once more. This is expected to translate into strong growth in the consumer sectors. The fast-moving consumer goods trio of Cadbury, Nestlé and Unilever are already considerably invested in Ghana and are likely to increase investment spending over the next few years as the economy takes off.
Headline Industry Data
2011 per capita food consumption (local currency) = +8.2%; forecast compound annual growth to 2015 = +8.2%
2011 beer volume sales = +7.0%; forecast compound annual growth to 2015 = +7.6%
2011 mass grocery retail sales = +41.05%; forecast compound annual growth to 2015 = +46.33%
Key Industry Trends
Guinness Ghana Breweries Investing: Guinness Ghana Breweries is looking to capitalise on forecast strong economic growth momentum to increase beer sales, with investment into low-cost beer and capacity expected. BMI is forecasting per capita beer consumption in Ghana to grow from 8 litres in 2010 (it was around 5 litres in 2002) to about 11 litres by 2015. As a sign of the firm’s eagerness to capitalise on the potential of the market, Guinness Ghana in September 2011 received approval to raise US$45mn on the local stock market. The firm is using the money to pay back debt and invest in its facilities, which will include improving its water and electricity supply.
Key Risks To Outlook
Regulatory Environment Needs Addressing: While BMI considers Ghana’s regulatory environment to be among the strongest in the region, BMI's view is highly relative, bearing in mind what else exists in the region. While Ghana is less bureaucratic than many of its peers, infrastructural development still lags. This will have to be addressed to bring down the cost of doing business.
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