It is emerging that the current business operations of players in Ghana’s banking sector are inimical to the country’s developmental priorities and goals.
Banking Consultant and Financial Analyst, Dr. Richmond Atuahene has observed that there is very little to no specialization in banking systems that support specific sector growth.
Per his observations, the banks in the country are mainly universal banks doing very little of almost everything without a specific focus or area of expertise.
This broad, non-specific approach has resulted in a diluted impact on the economy, as financial institutions are unable to adequately support the unique needs of critical sectors such as agriculture, manufacturing, real estate, and technology among others.
Dr. Atuahene in an interview with The High Street Journal emphasized that this jack-of-all-trades approach hampers the growth of industries that require tailored financial products and services to thrive. For instance, the agricultural sector, which is the backbone of Ghana’s economy, needs specific financing models that take into account the seasonal nature of farming and the associated risks.
He argues that due to the deficit of specialized banks, Ghana’s banking system falls short of driving the targeted economic growth that the country desperately needs. This, in turn, affects the overall development goals of the nation, as resources are not being effectively channeled to stimulate growth in vital economic areas.
He revealed that the banking system has become an arena where almost all banks mostly engage in the trading of government instruments (treasury bills and bonds) with very little portfolio in critical sectors such as agriculture, industry, real estate, etc.
He tells The High Street Journal that Ghana must take a cue from Nigeria. According to the banking consultant, Nigeria after realizing the universal banking system was not helpful decided to change the narrative in 2009.
Ahead of the National Economic Dialogue, Dr. Atuahene wants the discussions to also focus on how Ghana’s banking industry could be specialized to prioritize supporting critical sectors that enhance economic growth.
“One thing I want them to discuss is that we should change our banking banking system. Nigerians started with universal banking. After practicing it until 2009, they said it was not working for Nigeria. Ghana’s universal banking is not working because they become a jack of all trades but they have nothing to offer. All that they do is treasury bills,” he recounted.
As part of the new government’s reset agenda, he believes it is time for the country to refocus its banking system to support the development goals. He states that such specialization will allow experts in critical sectors of the economy to also enter the banking industry and offer expertise on funding in these critical areas.
“They don’t have the competencies like if it’s an agricultural bank. Go to an Agric bank and ask how many Agric specialists we have in there. How many of them understand the cost of planting maize, and how maize is done? Nothing,” he indicated.
He therefore called, “We should bring all the agric specialists, those in maize, those in poultry, bring them together and let them go and attack the poverty in food through agric. I believe that if we can change Agric Bank to focus on agriculture, not universal banking, it will go a long way to transform the economy.”
As the government gears up for the National Economic Dialogue on March 3 & 4, 2025, we will wait and see if this suggestion by the man with decades of experience in banking will be taken into account.
