Non-Interest Banking to Broaden Financing Options for Gov’t and Private Sector – Development Economist
Development Economist, Nicholas Issaka Gbana, has stated that the introduction of non-interest banking and finance by the Bank of Ghana (BoG) is expected to broaden the country’s financing options for both government and private enterprises.
Speaking during the NorvanReports, Economic Governance Platform (EGP), and Ghana Anti-Corruption Coalition (GACC) X Space discussion on the topic “Beyond Interest: Can Non-Interest Banking Reshape Ghana’s Financial Future?”, Mr. Ghana described the initiative as a welcome complement to Ghana’s financial system rather than a substitute.
“From East Africa to Southern Africa — Kenya, Tanzania, and Senegal — they’ve all gone into this phase. It’s not a silver bullet, but it is complementary to the extent that it expands our financing options, both for government and also for private enterprises,” he remarked.
He noted that misconceptions surrounding non-interest banking exist, but emphasised that demand for its products should not be a challenge, given the potential for asset-backed financing models. “Whether it’s the government needing money to build a road, dam, or irrigation system, as long as it is asset-backed and generates profit sharing, there will be no lack of demand for it,” he stated.
Mr. Gbana further explained that the new financing framework would allow the government to undertake major infrastructure projects without resorting to excessive borrowing. “Traditionally, governments have borrowed from international markets, but with non-interest banking, we can create special purpose vehicles (SPVs) for projects where investors fund infrastructure and share in the profits,” he noted, adding that such models will enhance financial sustainability and reduce public debt pressures.
Highlighting global trends, he pointed out that Islamic finance assets were valued at $5.5 trillion in 2024, with London, Luxembourg, and Amsterdam serving as leading financial hubs. He also stressed the importance of regulatory clarity in attracting such funds to Ghana. “Once the regulatory framework and instruments are clear, these funds will naturally flow into our market to finance both public and private sector projects,” he said.
According to him, non-interest banking also aligns with the global shift toward blended finance – combining debt, equity, and grants – to support development objectives. “We need additional blended finance sources to finance businesses. Whether through private equity, joint ventures, or the stock exchange, broadening the space is essential to attract more capital,” he added.
Mr. Gbana projected that as market acceptance of non-interest banking and finance grows, Ghana’s non-interest financial landscape will gradually expand beyond banking into the securities and investment sectors. “It’s good that the Bank of Ghana has started with the banking sector. The next step should be the entry of fund managers, private equity, and venture capital. By 2030, I expect to see major infrastructure projects in Ghana financed through these instruments,” he asserted.
