Possible threats from terrorists in surrounding nations, coupled with Ghana’s peacekeeping operations and efforts to counter piracy and drug smuggling, will be the major drivers of the country’s budget over the next five years, says a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Ghanaian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021’, the report states that the significant presence of ISIS in surrounding nations, such as Chad, Nigeria and Niger, pose a security threat to Ghana, necessitating higher allocations to the nation’s defence budget.
SDI forecasts Ghana’s military expenditure to grow at a compound annual growth rate (CAGR) of 2.56%, increasing from $177.1m in 2016 to $213.8m by 2021, while the cumulative expenditure on its armed forces during the forecast period is estimated to be $1.1bn.
The nation’s army is expected to account for the majority of the military capital expenditure, which is estimated to account for 23.9% of the total defence budget on average during the forecast period.
The per-capita defence expenditure is expected to increase marginally to $6.8 by the end of the forecast period, compared to $6.4 in 2016, due to to slow population growth.
SDI’s report further states that opportunities exist for equipment suppliers in areas, such as fighters and multi-role aircraft, and attack and transport helicopters. However, foreign direct investment (FDI) is prohibited in Ghana, making direct selling the only market entry route available for foreign defence operators.