 Banking on the future
Reforms have gone to the heart of Ghana's financial institutions, and a regulatory framework, legal system and incentive packages for investment are in place. Apart from the central bank, there are presently seven commercial, three development and five merchant banks.
Social Security and National Insurance Trust
(SSNIT), thesole pension provider, is the
biggest non-bank player in the financial sector.
Set up initially as a national provident fund in
1965, it has enormous resources at its disposal,
which it has invested in 21 companies, many listed
on the Ghana
stock exchange . SSNIT's investment policy is
simple, says Director General, Mr. Henry Dei. "Our
aim is to assist companies requiring funds, with
the ultimate objective of creating and sustaining
more jobs in Ghana." Job creation is a common
thread in Vision 2020.
Real estate remains the SSNIT's most visible area of operations. It provides affordable rental housing units across the country, and encourages private sector involvement in housing delivery. Mr. Dei explains : "We started by providing low-cost rental housing, but we now believe it is better to encourage medium- to higher-income earners to buy houses."
Though Ghana's Financial Sector Adjustment Program (FINSAP) is well into its second phase, strong challenges remain for the country's economy and fiscal planning.
|
Private savings and investment have remained low, threatening its ability to reach self-sustained, long-term growth. As well, the financial system has yet to acquire sufficient depth to encourage domestic savers into productive investment.
There have been successes, including the restructuring of financially distressed banks and a start at divesting state interest in all banks. This hopes to encourage greater efficiency and competition in the banking sector, and allow banks to raise interest paid on their deposits. This would then lead, according to the monetary authorities, to the happy integration of formal and informal financial institutions, resulting in access to informal savings.
"Currently, the spread between deposit and lending rates is quite large, driving a large portion of private savings outside the banking system and into instruments such as government securities. We need to deepen the inter-mediation process and pursue a rigorous open market policy to reduce liquidity in the economy," says Governor Duffuor.
|
GHANA
