Banks in the country do not support productive activities in the economy, Coordinator of the Third World Network (TWN), Dr Yao Graham, has said.
He said the Ghana’s banking sector was serving as a way for taking resources out of the country rather than serving as a medium through which lending was taking place to expand the economy.
“Our banking sector is dominated by foreign banks who export their earnings and do very little lending to the productive sectors of the economy,” he said in an interview with the GRAPHIC BUSINESS on the sidelines a workshop on finance and development in Africa.
“The banks are very profitable but if you look in their books, you find out that productive activities are not areas of lending. They are all interested in government bonds, securities, salary loans and household loans and this is major problem,” he added.
Access to credit
Dr Graham pointed out that in every economy which had developed, they established connection between the role of the banking and productive activities so that credit was available for people to invest in productive activities.
He said the situation was, however, different in Ghana, as businesses continued to complain about lack of access to credit.
“People who are importing finished goods get credit easily because there is the market for them to sell but people who are involved in risk taking by investing in agriculture and manufacturing sectors are having great difficulty accessing funds,” he noted.
“As a country, we have to create the conditions that encourage those who are managing financial assets to lend to those in the productive sectors.
We need a state intervention to craft a financial sector which is fit for the purposes of the economy,” he added.
He said until the country makes it possible for the productive sectors to grow, jobs cannot be created.