Analyzing the Risk of Investment in the Construction Industry of Ghana

Abstract

This study was undertaken to examine the risk associated to Construction projects investment in Ghana and the relationship between risk and investment in the construction industry of Ghana with more attention and focus on international joint ventures.. To accomplish the objectives of the study, investigations were conducted regarding the following factors of risks to investment: Political risk, Financial risk, Management risk, Technical risk, Legal and Policy risk, Strategic risk and Market risk, Specific areas such as human Resource, plant and equipment, software and technology, bidding and tendering stage, Legal and administrative work and no or low credibility of lenders and shareholders were outlined to determine how investment are done and the results or impact they give. Relationship between risk and investment was carefully examined.

The results of the analysis indicate that the majority of professionals in the industry have a good understanding of risk, and this means that their responses were of a professional view and its impulses reflect what happens on site or in the construction industry. The analysis of General Construction Industry (GCI) further indicates that financial risk during the investment of a project is high and very risky to venture into even though the less risky aspect of financial risks is considered. IJVs companies investment are channelled to software and technology, with the other elements such as human resource, plant and equipment, bidding and tendering, legal and administrative work having less investment channelled to them.

Keywords: Risk, Investment, International Joint Ventures (IJVs), Construction Firms/Companies, Construction Projects