"MTN\u2019s Shadow Banking Empire \u2013 Is Ghana\u2019s Financial Stability at Risk?"

" MTN\u2019s Shadow Banking Empire \u2013 Is Ghana\u2019s Financial Stability at Risk? \r\n \r\n \t The MTN Question \u2013 Corporate Power or Financial Risk? \r\n \r\nWhen mobile money (MoMo) launched in Ghana, it was hailed as a triumph of innovation, one that would democratise access to finance and bring the informal majority into the formal economy. At the forefront of this financial revolution was MTN Ghana, the country\u2019s largest telecom provider, whose yellow kiosks and app interfaces now underpin everyday transactions from Wa to Accra.\r\n\r\nBut nearly two decades later, MTN\u2019s financial footprint has morphed from a transactional tool to a quasi-banking empire , and its dominance has begun to raise uncomfortable questions. With mobile wallet float deposits now estimated to be nearly three times the size of the entire Ghanaian banking sector\u2019s deposit base, experts are warning that Ghana\u2019s economy may be sitting on a dangerously oversized financial ecosystem.\r\n\r\nThe ballroom at the Movenpick Ambassador Hotel was filled with applause on the evening of April 5, 2025, as Ghana\u2019s finest financial institutions gathered to celebrate excellence. But the evening\u2019s keynote address, delivered by Emeritus Professor Stephen Adei, economist, public administrator, and Companion of the Order of the Volta, cut through the ceremony with surgical clarity.\r\n\r\nIn a bold, unsparing speech, Prof. Adei took aim at what he described as one of the most urgent but overlooked threats to Ghana\u2019s financial system: the unchecked dominance of MTN\u2019s mobile money operations, which he likened to a shadow financial empire operating beyond the central bank\u2019s radar. \u201cMTN is today probably the biggest corporate financial institution in Ghana, even if many citizens are not aware of it,\u201d he began. \u201cIf left unchecked, MTN will hold the nation to ransom one day. Mark my words.\u201d\r\n\r\nIt was a thunderclap of a statement, and it came with data, analysis, and deep institutional insight. In a country where mobile money has become as common as cash itself, Prof. Adei\u2019s speech cast a spotlight on the mounting risks behind this convenience\u2014and questioned why regulators have not yet acted decisively.\r\n \r\n The Rise of MoMo\u2014and Its Hidden Empire \r\n\r\nMTN\u2019s mobile money platform currently serves over 15 million active users in Ghana, with daily transaction volumes exceeding hundreds of millions of cedis. In a country where less than 50% of adults have access to traditional bank accounts, the appeal is undeniable.\r\n\r\nBut the unintended consequence of that growth is that MTN has become, effectively, Ghana\u2019s largest financial institution, without ever registering as one. MoMo wallet balances, or \u201cfloat deposits\u201d, are meant to be held by licensed partner banks in trust. However, the operational control and liquidity flow remain with MTN , and most of these funds exist in a regulatory grey zone.\r\n\r\n The Scale of the Problem: \u201cThree Times the Banks\u201d \r\n\r\nAt the centre of Adei\u2019s concern is the sheer size of MTN\u2019s financial footprint. Ghana\u2019s largest telecom provider, through its mobile money (MoMo) platform, now controls float deposits that are nearly three times the total deposit base of the entire banking sector, as earlier reported in this article. \u201cThese are float deposits that sit largely outside the formal banking system,\u201d he warned. \u201cThey are not subject to the regulatory supervision that banks face, yet they influence liquidity, interest rates, and even the exchange rate.\u201d\r\n\r\nIndeed, Prof. Adei\u2019s revelations confirm what many insiders have whispered for years: that MTN has become a de facto bank , controlling critical liquidity flows, but without any of the capital adequacy requirements, lending regulations, or systemic safeguards that the rest of the financial sector must abide by.\r\n\r\nImagine a bank controlling a third of national liquidity with no regulatory compliance obligations. That, we at NorvanReports believe is essentially the position MTN is in.\r\n\r\n The Currency Drain: MoMo and the Forex Crisis \r\n\r\nOne of the most alarming dimensions of MTN\u2019s operations, Prof. Adei noted, lies in its role in Ghana\u2019s remittance ecosystem. Beyond liquidity concerns, MTN\u2019s remittance partnerships have further magnified its influence on Ghana\u2019s foreign exchange reserves . The company partners with 11 fintech firms to process inbound remittances, one of the country's largest sources of forex.\r\n\r\nHowever, these inflows are paid out locally in Ghanaian cedis, while the actual foreign currency is retained offshore or repatriated , bypassing the Bank of Ghana\u2019s reserves entirely, allegedly. Some financial experts have alleged contributing significantly to a cumulative FX loss running into billions of dollars between 2019 and 2024 .\u201d\r\n\r\nIn a country which grappled with dollar shortages, a volatile currency, and low foreign reserves, this revelation lands with particular weight. By monetising remittance flows in cedis while the USD equivalent remains offshore, MTN\u2019s model, Prof. Adei argues, is quietly undermining Ghana\u2019s forex stability. \u201cWe are losing control over one of the most stable sources of forex inflow,\u201d he lamented. \u201cAnd we\u2019re doing it in plain sight.\u201d\r\n\r\n Shadow Lending and the Threat of Credit Contagion \r\n\r\nMTN has also ventured into credit markets , partnering with some regulated institutions to offer small, collateral-free loans to millions of subscribers. While the company brands it as financial inclusion, critics argue it is a parallel credit market that operates without any of the tight oversight obligations imposed on banks, microfinance institutions, or savings and loan companies.\r\n\r\nBorrowers take loans directly from their mobile wallets, often at high interest rates, with automated deductions structured into MoMo transactions. Defaults are managed algorithmically, but there is no clear reporting of non-performing loans (NPLs) , creditworthiness metrics, or compliance with central bank lending caps. \u201cThere is zero transparency on credit exposure,\u201d noted a banking consultant. \u201cIf there were a major disruption to MTN\u2019s parent operations or platform failure, the cascading effect on consumer liquidity could trigger a mini-crisis in consumption and retail lending.\u201d\r\n\r\n A Broader Governance Crisis: \u201cThe State Must Wake Up\u201d \r\n\r\nIn his address, Prof. Adei placed the MTN dilemma within a broader indictment of Ghana\u2019s governance and regulatory culture. \u201cThe nation rises and falls on the quality of its governance framework,\u201d he said. \u201cAnd yet, when it comes to institutions like MTN, our regulatory response has been timid, reactive, and far too late.\u201d\r\n\r\nHe pointed to other sectors, such as mining, where the state has demanded equity stakes and greater transparency. In the same spirit, he proposed government acquisition of a 40% stake in MTN Ghana , echoing the model he supports for resource-based sectors. \u201cA company that can shape exchange rate trends, undermine fiscal tools, and operate like a bank without a licence must not be left to grow unchecked,\u201d he emphasised.\r\n\r\nWhat makes the situation more precarious is the absence of crisis planning. MTN\u2019s operations are integrated into the daily lives of millions, used for salaries, school fees, taxes, and even government social interventions.\r\n\r\nYet, in the event of:\r\n \r\n \t A market exit \r\n \t An MTN Group-wide insolvency \r\n \t A cybersecurity breach \r\n \t Or a government-declared regulatory freeze \r\n \r\nThere is no resolution mechanism akin to those required of licensed banks. In short, MTN has become \u201ctoo big to ignore\u201d without being \u201ctoo regulated to fail\u201d.\r\n\r\n Policy Vacuum or Policy Capture? \r\n\r\nObservers are also questioning why regulators and policymakers have been reluctant to act . \u201cPart of the problem is regulatory lag,\u201d says a governance researcher at the University of Ghana. \u201cBut the bigger issue is what we call policy capture. MTN is a major taxpayer, employer, and public-facing brand. It\u2019s difficult for politicians to push for strict reforms without facing backlash or lobbying pressure.\u201d\r\n\r\nIndeed, Prof. Adei alluded to this uncomfortable truth in his speech, noting that even respected members of the economic elite serve on MTN Ghana\u2019s board. \u201cI know I\u2019m treading on dangerous ground,\u201d he said, \u201cbut silence is complicity.\u201d\r\n\r\n Policy Roadmap: The Adei Doctrine \r\n\r\nAs a former board member of Baroda Bank and chair of two major mutual funds, Prof. Adei\u2019s critique comes not from alarmism but from experience. He offered concrete policy proposals during his remarks:\r\n \r\n \t Track and Regulate All Remittance Flows: \u201cAll foreign exchange must be accounted for by the Bank of Ghana. Full repatriation of forex from fintech partners must be non-negotiable.\u201d \r\n \t Subject MTN to Prudential Regulation: MTN\u2019s lending activities must fall under the purview of the Financial Stability Council, with borrower protection and responsible lending standards enforced. \u201cMTN must be classified as a systemically important financial institution, with float deposits included in monetary policy frameworks.\u201d \r\n \t Audit the Cloud Infrastructure: \u201cWe must understand the operational risks of digital wallet systems, particularly in cloud architecture that\u2019s not domiciled locally.\u201d \r\n \t Restructure Float Holdings via the Domestic Debt Exchange Programme (DDEP): There is growing support for requiring MTN to invest a significant portion of its float deposits in Domestic Debt Exchange Programme (DDEP) bonds, holding them to maturity. In exchange, banks would receive upfront cash injections to improve sector liquidity and restore credit to the real economy. \r\n \r\n\u201cIf we can\u2019t control the float, we can at least direct its deployment,\u201d said a senior advisor at the Ministry of Finance. \u201cThat\u2019s the essence of fiscal sovereignty.\u201d\r\n\r\n Silence, Power, and Policy Capture \r\n\r\nIn a particularly revealing moment, the maverick Prof. Adei acknowledged the political sensitivity of his critique: \u201cThe Chairman of the first Ghana\u2019s Economic Forum under the government of John Mahama is also MTN Ghana\u2019s Board Chair, and my mentor, Ishmael Yamson. I know I risk a serious reprimand for speaking out. But silence would be complicity.\u201d\r\n\r\nThis admission underscores the political complexity around MTN. As a top taxpayer, employer, and ubiquitous brand, MTN wields immense soft power. But Adei\u2019s remarks were a call to break that silence and reassert the primacy of regulation in a functional democracy.\r\n\r\n The Cost of Inaction \r\n\r\nFor Prof. Adei, this is not a debate about a telecom company; it is about the credibility of Ghana\u2019s economic management . \u201cWithout action, we risk currency instability, fiscal slippage, and a liquidity crunch in the banking sector. Investors will lose confidence. And Ghana will lose control of its own financial future.\u201d\r\n\r\nHis final call was not for panic but for bold leadership: \u201cResetting the agenda must have as its centrepiece resolving the debt crisis\u2014and helping the corporate finance sector feel secure to lend long term. That begins with recognising where unchecked power lies.\u201d\r\n\r\nFor now, the system holds, but the margin for error is narrowing. \u201cWe must remember that innovation without regulation is a ticking time bomb,\u201d Prof. Adei concluded. \u201cLet\u2019s not wait for the explosion.\u201d"

"MTN\u2019s Shadow Banking Empire \u2013 Is Ghana\u2019s Financial Stability at Risk?"

Naira Ends Week Stable as External Reserves GrowAMP

Top 10 Copper Exporting Countries in AfricaAMP

Too Big to Merge? Exxon and Chevron Might Think SoAMP

NorvanReports & EGP X Space on the Topic “Cedi’s Comeback, Debt Reversal & Fiscal Hope: A Genuine Reset or Temporary Relief?”AMP

Verstappen Triumphs in Spa Sprint as Red Bull Begins New EraAMP

Clash of Champions: England and Spain Renew Rivalry in UEFA Women’s EURO FinalAMP

Super Falcons Soar: Nigeria’s Epic Comeback Claims 10th WAFCON TitleAMP

Ghana Mourns Highlife Legend Daddy LumbaAMP

Alliance of Sahel States Advance Plans for Regional Development BankAMP

Naira Ends Week Stable as External Reserves GrowAMP

Top 10 Copper Exporting Countries in AfricaAMP

Too Big to Merge? Exxon and Chevron Might Think SoAMP

NorvanReports & EGP X Space on the Topic “Cedi’s Comeback, Debt Reversal & Fiscal Hope: A Genuine Reset or Temporary Relief?”AMP

Verstappen Triumphs in Spa Sprint as Red Bull Begins New EraAMP