Ghana’s merger and acquisition deals rank 107th on Ernst &Young’s 2012 Maturity Index
Ghana is ranked 107 out of 148 countries on the 2012 merger and acquisition (M&A) Maturity Index published July 26, 2012 by Ernst & Young in collaboration with the M&A Research Center at Cass Business School.
The country is beaten by fellow African countries South Africa, Egypt and Nigeria
Ghana had a maturity index score of 39%, while South Africa, Egypt and Nigeria recorded 60%, 56% and 41% score respectively.
The annual index ranks 148 countries on their ability to attract both domestic and cross border M&A deals.
The rankings are based on an analysis of a country’s regulatory, political, economic and financial environments, along with its technological capability, socio-economic characteristics, infrastructure and assets.
Unusually among its cohort of countries outside the top 100 of the M&A Maturity Index, the report said Ghana’s key M&A strength is a regulatory and political climate that is equal to, or higher than, that of many more advanced economies. “The country scored well on the ability to enforce contracts (61%), control of corruption (60%) and ability to complete transactions with a minimum of interference (65%) and receives middling scores for political stability (48%) and the rest of the regulatory categories,” it said.
However, Ghana’s greatest weakness was in the technological area. It scored just 17% for innovation, 25% for internet penetration levels and 33% for high-technology exports which the report says is “unsurprisingly for a country that has widespread poverty at a low level of development.”
Ghana also had lower scores in the infrastructure and assets categories, with low scores for road networks (20%) and railways (23%), although it scored moderately higher for the number of potential investment targets (50%).
The US and Singapore were the world’s most attractive markets in which to do M&A. The US continues to be the top ranked country globally in terms of M&A maturity, closely followed by Singapore while the UK follows in third position ahead of Hong Kong in fourth.
Alexis Karklins-Marchay, Emerging Markets Center Leader at Ernst & Young explains that the lofty rankings of Singapore and Hong Kong are driven mainly by their highly-developed infrastructure, the availability of significant assets for purchase and the business-friendly regulatory environment.
Anna Faelten, Deputy Director of Cass’s M&A Research Center on the other hand indicated that “the fact that a country is highly ranked does not necessarily suggest that it currently has high values or volumes of M&A – these are not yet present for many emerging nations – but top rankings do suggest strong conditions for M&A to grow and thrive.”
Across the Index, a country’s technological developments and socio-economic characteristics were found to be the most important factors driving M&A volume, ahead of its economic and financial characteristics.
By Ekow Quandzie