It has emerged that the commerce and finance sectors were the major recipients of all secured loans in Ghana in the second quarter of 2024.
The latest Collateral Registry Quarterly Brief for the second quarter of 2024 published by the Bank of Ghana reveals that Commerce and Finance took a 36.3% share of the total loan value secured in the country during the period under review. The Services sector followed securing 16.6% of the total loans. Next to the Services sector is the Construction sector which also gained 9.8% of the loans.
These sectors were trailed by Manufacturing, which accounted for 4.4%, and the Mining and Quarrying sector, which received 2.2%. The Agriculture, Forestry, and Fishing sectors, despite being pivotal to Ghana’s economy, received only 1.1% of the total secured loans.
Worthy of mention is an important sector as Industry which only received a paltry 0.1% share of the total loans secured.
The concentration of the loans secured in less productive sectors buttresses the experts’ assertion that Ghana’s economic growth is not happening in sectors that have the potential to create many jobs. This means that the chunk of the loans fuel trade activities, and business facilitation among others.
This trend explains why unemployment is on the rise despite the much-touted steady economic growth over the years.
The relatively low allocation of secured loans to sectors such as Manufacturing, Industry, and Agriculture is hindering the needed economic transformation that will create more sustainable jobs. The limited financial support to these sectors could slow their growth and affect the generation of employment to engage the teaming of unemployed youth.
With this development, it is imperative that authorities implement deliberate strategies that will ensure that the real productive sectors of the economy are well-financed to propel industrial growth, enhance food security, and create a diversified and resilient economy with sustainable jobs.
The total value of secured loans registered by banks and Specialized Deposit-taking Institutions (SDIs) saw significant growth, increasing by 83.1% from GHS 5.9 billion in Q2 2023 to GHS 10.8 billion in Q2 2024.
Banks were the dominant lenders, contributing GHS 9.1 billion of this total, a rise of 85.7% year-on-year. SDIs followed with GHS 1.7 billion, marking a 75.1% increase from the same period last year.
