Ghana’s hotels and restaurants sector expanded by an estimated 11.3% in 2010, probably because of an increase in business travellers, Renaissance Capital said in a research report.

“Business travellers likely made up a significant share of the increase in arrivals, which speaks to the opportunities that foreign investors see in Ghana,” the investment bank noted.

Renaissance expects a pick-up in activity in Ghana’s business services sector as a result of the commencement of oil production.

“Ahead of the start of oil production on 15 December 2010, the business services sectors, including ICT, financial services, commerce, and the hospitality sector (hotels and restaurants) exhibited strong growth. As such, the services sector, which made up 50% of GDP in 2010, was the fastest growing sector at 8.2%, compared with 4.8% and 6.0% in the agricultural and industrial sectors, respectively. We expect this level of activity in the services sector to be sustained in 2011.”

According to Renaissance, oil production is expected to reach 120,000 barrels per day (bpd) by mid-2011, although new discoveries suggest that this may be a conservative estimate. Ghana’s production currently cannot exceed 200,000 bpd as that is the capacity of the existing floating production storage.

“Proven reserves of 1.5 billion barrels, compared with 37 billion barrels in Nigeria, imply that Ghana’s number of years of reserves is significantly lower than that of Africa’s oil majors and Ghana’s oil production will peak in the next five years and thereafter decline,” the bank said.

Oil production is expected to propel Ghana’s GDP growth to 10.5% in 2011, from 6.6% in 2010. Renaissance expects this growth to moderate to 7.1% in 2012.

It is estimated that foreign direct investment (FDI) increased by 25% to US$2.1 billion in 2010, the majority of which flowed into the oil sector.