Financial sector faces challenges

Mona Helen Quartey, Deputy Minister of Finance, says the task of reforming the financial sector in the country has not been accomplished.

According to her, the industry is faced with a lot of challenges, including low levels of savings, investment gap, huge amounts of money outside the banking system and limited access to credit by SMEs.

Ms Quartey cited high financial exclusion and cost of financial intermediation that has resulted in the high spread between borrowing and lending rate as challenges facing the financial sector.

The Deputy Minister, in a speech read on her behalf at the final draw of Fidelity Bank’s ‘Save for gold’ promotion, said Ghana has the lowest savings ratio in sub-Saharan Africa- 8 to 12 percent compared to 25 percent average for the sub-region.

“This is an impediment to rapid growth and development. Our ability to increase the savings rate depends on money factors with important one being the development of savings products by the banks,” he said.

With micro-economic stability incrementally improving, Ms Quartey said Ghana is poised for growth, adding that financial institutions now have the opportunity to expand their services and reduce their costs.

She said government is concerned about the persistent high lending and interested in seeing the expansion of financial services to the disadvantage to society, especially the rural poor.

She called on financial institutions to demonstrate a commitment to expanding financial service access for all.

Ms Quartey said domestic resource mobilization has become very important to how government finances the Sustainable Development Goals (SDGs), the AU Agenda 2063 and the country’s own 40-year national long term plan.

“These visions remain as relevant as ever, but we cannot achieve the vision without a combination of results or coming together.

“In addition to regulatory framework and an enabling environment, human resources and skills development in Ghana is very important. If you want to build a stronger and more competitive economy, we need to build our people,” he said.

“The challenge is a tough one, but I am very confident that both government and industry are up to the task,” she added.