Ghana's financial sector has undergone significant changes over the years. The government, through the implementation of the Financial Sector Strategic Plan (FINSSP) intends to promote the evolution of a financial sector, which is in tandem with the needs of a country moving towards a middle income status and set to be an oil producer.
The banking system has showed a continuous surge in asset growth resulting mainly from credit expansion, with bank deposits and borrowings being used to fund the growth in assets.
Trends in industry
The bank and non-bank financial institutions have recorded significant
growth in recent years due to the relatively stable macroeconomic environment. In the face of stiff competition, banks introduced new products, services and strategies in the market for customer funds.
Investment opportunities
There is a high demand for various financial services, as shown by the consistent high growth of companies in the sector. Potential investors also have access to opportunities supplying services to the under-developed financial services sector in neighbouring countries. New investment opportunities for expanding and diversifying financial services exports are also emerging with the establishment of off-shore banking services.
Credit Reference Bureaus
There are opportunities for financial institutions to acquire licenses for the operation of credit reference bureaus. The Credit Report Act,
which become law in June 2007, is supposed to provide a legal and regulatory framework for credit reporting to banks operating in the country.
The availability of credit information is generally accepted to be crucial for the development and maintenance of an effective financial sector, yet borrowers tend to have a natural incentive not to reveal negative information about themselves. The lack of a credit information system increases the risks of lending, and causes financial institutitions to provide less credit. A credit reporting system in ghana would therefore provide timely, accurate and up to date information on the debt profile and repayment history of borrowers leading to benefits.
Providing services to the oil industry
Enormous opportunities exist for the banking and financial sector to develop the appropriate product to support the oil industry. Ghana struck oil in commercial quantities
estimated at 3 billion barrels and further exploration is in progress. Total expected oil revenues accruing to the state are estimated at US$ 836,777,100.00 per annum. Banking services that would be needed include financing for the Ghana National Petroleum Corporation’s interests, transfers, letters of credit, financing rigs and supply vessels, and importing foreign flags rigs.
All equipment and facilities of the oil industry will require insurance, while various downstream activities in the sector also require significant financing.
General investment opportunities exist for the following range of companies:
Universal, development and investment banks. Insurance, reinsurance, leasing, venture capital, hire purchase, export finance and savings and loans companies. Mortgage finance institutions, mutual
funds, investment trusts and specialized finance houses.
For further information on investing in financial services and banking, including available sector specific incentives contact the Ghana Investment Promotion Centre, GPIC .
Key contact:
Edward Ashong-Lartey
Director, Promotions & Public Relations
Email: eashonglartey@gipcghana.com
Tel: +233 302 665125 - 9
