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A startling new study reveals a troubling trend in Ghana’s financial landscape: banks are increasingly turning away from lending to the very sectors that fuel sustainable economic growth. According to the study, credit to critical areas such as agriculture and manufacturing plunged by 65% and 56% respectively, between 1999 and 2023. Instead, credit has increasingly flowed to commerce and services. Economists warn that this shift undermines job creation and industrialization, with many Ghanaians turning to informal trade instead. Experts blame foreign-dominated banks’ risk aversion and the Bank of Ghana’s rigid inflation-targeting policy, which prioritizes monetary stability over productive lending. They’re urging a policy rethink—one that channels affordable credit into agriculture and industry, revives development banks, and restores the central bank’s developmental mission.
The Conversation