It Employs a Third of the Country’s Population, but Ghana’s Ag Sector Remains Largely Unbanked
Commercial banks dominate the lending space in Ghana, providing more than 85 percent of the total amount lent by financial institutions. At the same time, these banks have historically preferred investing in government securities over providing loans to the economy. In fact, investments in long-term bonds and short-term Treasury bills represent almost half of Ghanaian banks’ total assets.
Where does that leave the nearly 30 percent of Ghana’s population who work in the agriculture sector? According to a new Policy LINK survey of the country’s agricultural lending landscape, banks’ loans for agriculture and fisheries represent just 3.5 percent of their total portfolios. Making matters worse, this shortfall has persisted through more than two years of pandemic stimulus measures put in place by the Bank of Ghana.
Boosting financial access for Ghana’s agricultural sector will take a concerted effort by the government of Ghana and the country’s private sector, along with support from development partners like USAID. Read the brief, along with Policy LINK’s recommendations, here.