Africa: Ghana’s banking industry one of the most attractive sectors for investors, says 2nd Deputy Governor
Second Deputy Governor of the Bank of Ghana (BoG), Elsie Awadzi Addo, has said the country’s banking sector is one of the most attractive for investors on the continent.
Making the assertion at the First Bank of Nigeria (FBN) Ghana GALA Dinner, Mrs Awadzi-Addo’s noted that the presence of international and pan-African banks in the country is testament of investors preference and confidence in the Ghanaian economy.
The Second Deputy Governor’s assertion is affirmed by RMB’s Where to Invest in Africa 2021 report which ranks the country sixth place in investment attractiveness on the Continent.
Assigning reasons for the country’s ranking, RMB – the corporate and investment banking arm of FirstRand Bank Ltd – asserts that Ghana entered the current Covid crisis on a relatively stronger footing than its African peers with its economy managing to avoid a recession in 2020 and registering growth of 0.4% outperforming SSA economies which contracted by 3.2% on average.
The banking sector, Mrs Awadzi-Addo notes, is stable, profitable, and resilient, supported by an enabling macroeconomic framework, regulatory and supervisory reforms that have promoted resilience, good corporate governance, effective risk management, and innovation in the industry.
Speaking further at the event, Mrs Awadzi-Addo noted that banks in the country have played a critical role in helping to mute the effects of the pandemic on the real sector by restructuring loans and suspending loan repayments for customers who were negatively impacted by the pandemic.
Adding that, banks provided new loans in the total amount of GHC 27.8 billion from March to December 2020 to sectors of the economy like the pharmaceuticals industry, the textiles and garments industry, that were critical in helping to fight the pandemic.
Also commenting on the recovery of the economy, the Second Deputy Governor remarked that banks are expected to continue in their efforts to support a strong recovery of the Ghanaian economy.
“To this end, we expect banks to significantly increase credit to the private sector, and to reasonable and affordable interest rates. We remain concerned about the relatively high lending rates that banks continue to charge their customers, with spreads over and above the Ghana Reference and very high fees, commissions and other costs imposed on customers which excludes many small and medium-sized businesses out of the credit market and by extension impedes their survival and growth.
“As a nation, we lose significant opportunities to grow strong viable brands that can compete with businesses across the African market and beyond, if we do not provide mechanisms for financing our small businesses on a consistent and sustainable basis,” she noted.
