Wealth creation can be achieved through tactical and calculated steps.
Ghana has a lot of investment opportunities. This post is directed to both expatriates and Ghanaians willing to put blood and sweat into the right channel of investment for optimal returns.
The average person seeks to secure a good job, hope to purchase that prestigious car and dwell in that house s/he has long been dreaming about. Creating wealth does not come on a silver platter but by dint of hard work and wise investments.
We share with you six investment tools that can help you create the wealth you have been craving for.
Most people have heard of Bonds, Stocks or the Stock Market. There are other different ways to invest your money to yield favourable returns. Investment tools are generally grouped into Assets, Holdings, and Portfolio.
READ ALSO: Investment Opportunities in Ghana
Assets are owned resources expected to increase in value over a time.
Holdings are the specific assets contained in your assets. And Portfolio refers to all investments in a group. You can diversify your portfolio by investing in a variety of assets. Assets are also grouped into classes called: bonds, stocks or cash. (The cash you use to spend is also another form of asset or investment of your value turned into Cash. Knowing these terms shares more light on their importance and where to earn more.
Ownership Investments in Ghana
When you purchase an ownership investment, that asset is yours and is expected to increase in value. The following list some of the ownership investment types in Ghana. Or as we have listed to be the top six investment tools to use in Ghana.
Real estate is one of the safest investments in the world. It is in constant demand and its value rarely ever depreciates. Land, for example, can be leased off for short or long durations.
A better alternative especially where land is located in prime areas is to build either a residential or commercial facility on it. You can make significant returns on what you build by renting it out or leasing. Alternatively, you could buy a condo and rent/lease to secure a steady income stream. Moreover, real estate can be used as security for the future whenever the need arises. Whatever your choice, building or buying real estate is a safe, low-risk investment to make.
Hotels are generally a solid investment option. They produce predictable incomes and are a departure from traditional real estate investments such as residential properties that are merely bought and sold.
In other markets such as the US real estate market, many business class hotels can cost about $2 to $15 million dollars to invest in, whiles luxury hotels can rise up to a whopping $60 million. Such costs should be readily expected when investing in hotels in Ghana. It would be great folly to underestimate the costs of anything in Ghana, much less real estate. In fact, there are many factors that go into determining the cost of doing business in Ghana.
The Ghana Investment Promotion Center (GIPC) should be the first resource for determining the cost of investing in a hotel in Ghana. They provide insight into variables such as business registration, labour or employment options, taxes, utilities and rent.
In spite of the high costs associated with major investments in projects like hotels in Ghana, there are still many reasons in favour of such investments. These include:
- There is still a strong demand for hotels in the Country. The industry has not reached its saturation point yet.
- There is a good balance of customers with a mix of wealthy Ghanaians and foreign visitors depending heavily on hotels for comfortable stays.
- There is low seasonality in the sense that, the seasons do not really affect hotel patronage
In the last few years, Ghana’s Foreign Direct Investment (FDI) has steadily grown. Touted as one of West Africa’s leading democracies, Ghana has proven to be a safe investment space for many. This explains the emergence of major international hotels brands such as the Marriott as recently as 2018.
Fortunately, the industry is far from exhausted. Currently, there are about ten major global brands that dominate the hotel sector in Ghana. These include the Labadi Beach Hotel, a subsidiary of the Legacy Group in South Africa, Golden Tulip Hotel, one of the Louvre Group Hotels, the famed Holiday Inn, Movenpick Ambassador Hotel and Kempinski Hotel Gold Coast Accra.
Compared to other African Countries like Nigeria or even South Africa, there is clearly more than enough room for other players to enter the market.
2. Fast Food Franchises
Ghanaians really love their food and this is evidenced by the countless restaurants sprinkled around the country. Accra particularly has a lot of restaurants that cater to western palates and not just local menus. Interestingly, unlike most non-African countries where fast food joints are littered at every other corner, Ghana is relatively virgin terrain when it comes to fast food.
This is certainly not because the Country is a stranger to fast food franchises. In the last ten years, several global brands have entered and are prospering in the Ghanaian market space including burger king, pizza hut and KFC. Quite simply, fast food franchises should be an obvious recommendation for potential investors in Ghana.
McDonald’s for instance, a brand that is still not present in Ghana is recorded to have a whopping 80% of their restaurants worldwide being owned by local franchises. In spite of the large initial start-up costs associated with starting a global franchise locally, these restaurants generally benefit from the massive support of international marketing campaigns. Local franchises rarely have to work to gain a new audience.
Food chains, especially the popular global brands are consistently profitable and are able to generate the requisite cash flow to support operations. They are historically all-season performers.
3. Oil and Gas
Oil and petroleum remain in high demand all over the world and there’s no sign of this reducing any time soon. Dallas based Company, Kosmos Energy first discovered oil in Ghana in 2007. This discovery was hailed as one of the biggest oil finds in the last decade offshore West Africa. According to GIPC, Ghana has been commercially producing oil since December 2010. Presently, there are four major oil and gas fields in the Country. These are:
- The Jubilee Fields
- The Saltpond Fields
- The TEN Fields
- The Sankofa Gye Nyame Fields
Imad Mesdoua, Senior Consultant for Africa at Control Risks indicated in an interview with CNBC that Ghana is about to have an oil boom. This is in line with the 8.3 economic growth that Ghana has experienced as of July 2018. In fact, oil and gas exploration in Ghana is ongoing and the amount of crude and natural gas continues to grow.
The oil and gas industry in Ghana right now is ripe for investment in both exploration and investment. The economy is fairly stable and the political landscape is one of the most peaceful in Africa. Investors would be wise to enter the market now.
Ghana is globally known for its possession of four major mineral resources, namely gold, diamonds, manganese and bauxite. Ghana is Africa’s largest producer of Gold, with a record production of 80.5 t in 2008. Other minerals that are available in Ghana are natural gas and petroleum discussed above, silver and salt. Mining is a huge area of foreign investments in the Country.
There are about 23 large-scale mining companies operating in the extractive industry in Ghana. Investment possibilities in the industry are available and growing in the areas of exploitation or production and industrial processes. According to GIPC, this includes:
- The production of industrial minerals for both local and international consumption
- Application/processing of industrial minerals in the areas of construction, ceramics, paints, electronics, filtration, plastics, glass, detergents and paper.
Although a large majority of large-scale mining companies are multinational, small-scale mining in Ghana is exclusively reserved for Ghanaians.
The mining industry in the Country accounts for 5% of the Country’s GDP with minerals making up about 37% of total export.
5. Land Ownership
Trying to Own land in Ghana can be very strenuous. It can also be very rewarding when all the documents are original and authentic.
The most rewarding part of owning land in Ghana is when the land is at a business potential location. Locations closer to Malls, Markets and Cities have a higher rate of return on investment.
Technically, owning land in Ghana as a company or individual is mostly on a leased basis. You cannot own land as a company or an individual indefinitely. Leases vary from 25 to 150 years.
Foreigners even have shorter lease time than most Ghanaians but can be negotiable. It is prudent to contact a verified Real Estate Agent or Agency to speed up the land acquisition process.
READ ALSO: How to Make Money From Real Estate
The following process needed to acquire land in Ghana.
1. Do due diligence. (Be very vigilant and make enquiries with the Lands Commission to very the ownership of the seller.)
2. Search Process. ( Make sure the land has not been sold to another company or person.)
3. High an independent surveyor.
4. Be aware that all lands are sold as leasehold.
5. Draft and sign a purchase and transfer agreement.
6. Register with Land Commision.