The expected gradual depreciation of the cedi to the US dollar will affect consumer spending for electronic products in Ghana.
According to Fitch, Ghana slipped by one place to occupy the 11th position among 12 countries with respect to Consumer Electronic Risk/Reward Index for the second quarter of 2020, which primarily is about the positive economic environment for consumer electronics.
Ghana was just a step away from the least-ranked country – Iran.
Ghana has an overall score of 39 points out of 100 points, and is the 5th-ranked African country.
The ratings agency said: “This reflects our modest forecast revisions in light of the gradual depreciation of the Ghanaian cedi over the 2020 period, which will weigh on the affordability of products in the import-reliant market”.
The rankings of the market leaders, Qatar (63.6 points) and the UAE (69.2 points) are unchanged and they top the league table as the first- and second-most attractive markets on the league table, respectively.
In Qatar, stronger spending on higher-end items such as ultra-premium smartphones, smart products and wearables will go some way toward offsetting the impact of PC saturation and the threat of tablet and notebook cannibalisation by smartphones.
“We also note tailwinds from the upcoming 2022 FIFA World Cup high levels of economic activity, and rising incomes, which will support increased spending, particularly on audiovisual devices such as ultra-HD and HDR TV sets”, Fitch noted.
South Africa was the highest-ranked country in Africa (5th among the 12 countries) with an index of 45.5 points.
Nigeria was second with an index of 42.3 points while Kenya and Egypt were 4th and 5th, respectively with 39.3 and 39.2 points, respectively. Kenya actually registered the biggest leap on the Index, moving up to rank 9th, from 12th place the previous quarter.
The Consumer Electronics Index comprises two sub-indices, Rewards and Risks, which have a 70% and 30% weighting, respectively.
Rewards comprises Industry Rewards and Country Rewards, which have a 65% and 35% weighting respectively and are based on the growth/size of the Consumer Electronics industry and the broader economic/socio-demographic environment (Country).