By Ghana was ranked as the second most attractive country for power supply among 18 countries in Sub-Saharan Africa, according to Fitch Solutions.
The country was surpassed only by South Africa, with Botswana coming in third.
The report noted that Ghana had one of the lowest Power Risk/Reward Index scores in the SSA region, with its risk/reward index slightly above 50%, compared to South Africa’s near 50%.
Among the 18 countries, Sudan (18th), DRC (17th), Zimbabwe, and Mozambique (16th) were ranked at the bottom, with their risk/reward indices being very high.
“We expect political and economic risks to limit power sector growth in Sub-Saharan Africa over the next decade. Political instability and economic challenges in Sub-Saharan Africa will continue to pose major hurdles for power sector development.”
“Countries within the region, such as Ethiopia, Kenya, Nigeria, and South Africa are grappling with issues such as corruption, social unrest, and economic inequality, which deter foreign investment and complicate infrastructure project developments”, it added.
Furthermore, the UK-based firm noted that despite government efforts to reform power markets and encourage private sector participation, the volatile political climate and weak governance structures undermine the effectiveness of these initiatives.
For instance, it said “in Nigeria, the ongoing conflict in the Northern regions and pervasive corruption issues have hindered the liberalisation of the power sector, limited the effectiveness of reforms, and deterred potential investors”.
Additionally, the economic outlook for Sub-Saharan Africa is overshadowed by high debt levels and limited fiscal space.
“An increase in public debt consumes a share of the national savings and this decrease in savings leads to higher interest rates, diminishing the incentives for investment. The International Monetary Fund (IMF) expects that the average debt ratio for SSA will remain elevated at around 60%, thus constraining public spending on infrastructure projects, including in the power sector”, it mentioned.
