Ghana’s banking sector is increasingly redirecting credit toward import-driven businesses, reflecting mounting pressures on domestic manufacturing from government policy constraints and adverse global macroeconomic conditions. While the shift offers banks faster loan recovery and lower default risk, analysts warn it could further entrench the country’s dependence on imports and weaken long-term industrial growth.
Data trends and industry assessments show that financial institutions are becoming more cautious about lending to production-based sectors, particularly manufacturing and agriculture, amid persistent inflation, exchange-rate instability, and elevated operating costs.
Speaking in an interview with The High Street Journal, Lawrence Sackey, Research Manager at the Ghana Association of Banks (GAB), explained that banks’ lending behaviour is increasingly shaped by risk management considerations rather than long-term development outcomes.
“Banks are more susceptible to giving money to people in the import business. They import, sell quickly, and can make repayments, unlike the traditional or real sectors of the economy that are into production,” he said.
Manufacturing Continues to Underperform
Recent indicators from the Ghana Statistical Service (GSS), including movements in the monthly inflation index, suggest that manufacturing activity remains under pressure. Rising energy costs, expensive credit, currency depreciation, and imported input inflation have weakened output and reduced profit margins across the sector.
Global macroeconomic conditions have amplified these challenges. Tighter financial conditions, post-COVID supply-chain disruptions, and slower global growth have made long-term production financing increasingly unattractive for lenders. At the domestic level, fiscal consolidation measures have also limited policy space for sustained industrial support.
As a result, banks have scaled back exposure to manufacturing, where returns are slower and repayment capacity is more sensitive to economic shocks.
“These sectors are often affected by macroeconomic conditions, which have been quite fluid and volatile over the past five years, especially post-COVID,” Sackey noted.
Import Trade Seen as Lower Risk
In contrast, import-related activities are emerging as a preferred destination for bank credit. Ghana’s consumption-driven economy allows importers to turn over inventory quickly, improving cash flow and repayment certainty.
“In the import business, you know that at least the proceeds are guaranteed,” Sackey explained. “Some of these people do the importation at the back of pre-orders.”
Under such arrangements, goods are often sold almost immediately upon arrival, allowing borrowers to meet repayment obligations with minimal exposure to market uncertainty.
“Once they take a facility from the bank, they import, sell out, get their profit margin, and make loan repayments. It is quite simple,” he added.
This stands in sharp contrast to agriculture and manufacturing, where seasonal risks, price volatility, and infrastructure gaps contribute to higher non-performing loans (NPLs).
“If you look at NPLs in certain sectors, especially agriculture and production, they are quite high compared to import-related activities,” Sackey said.
Macroeconomic Risks Loom
Despite its short-term appeal to lenders, the growing tilt toward import financing raises structural concerns. Increased import activity without a corresponding expansion in domestic production places pressure on Ghana’s balance of payments and exchange rate, while weakening local industrial capacity.
“Holistically, if you look at it from a macroeconomic perspective, this will not work out well for the country,” Sackey cautioned.
The trend reflects deeper challenges within Ghana’s industrial policy framework. While successive initiatives have sought to boost local manufacturing, financing constraints and macroeconomic instability continue to limit the sector’s competitiveness against imported goods.
Calls for Credit Rebalancing
Industry experts stress that reversing the trend will require coordinated policy action, including improved macroeconomic stability, credit risk-sharing mechanisms, and targeted incentives to de-risk lending to manufacturing and agriculture.
“Even though banks are cashing out from this trajectory, there is a need for more credit to go into the real sectors of the economy, particularly agriculture and minor production,” Sackey said.
Until those conditions improve, banks are expected to continue favouring import-oriented businesses, reinforcing a cycle in which Ghana’s economy consumes more from abroad while domestic manufacturing struggles to recover.
