Ghana Strengthens State-Owned Financial Institutions to Support Micro, Small and Medium Enterprises (MSMEs)

Strategic Insights -

Government has announced plans to strengthen state-owned financial institutions, requiring state-owned enterprises (SOEs) and covered entities to transact more with state banks such as GCB Bank PLC. This initiative aims to build the capacity of national institutions to better support development priorities, including financing MSMEs, which are the backbone of Ghana's economy. Deputy Minister of Finance, Mr. Thomas Nyarko-Ampem, emphasized that this move is not about excluding private banks, but about building national institutions strong enough to finance national priorities.

Key Takeaways:

  • The Ghanaian government has reaffirmed its commitment to strengthening state-owned financial institutions to support MSMEs.
  • State-owned enterprises (SOEs) and covered entities will be required to transact more with state banks such as GCB Bank PLC.
  • MSMEs account for over 90% of businesses in Ghana, employing nearly 80% of the workforce, and contributing about 60% to the national GDP.
  • The Deputy Minister of Finance highlighted government interventions aimed at creating a stronger business environment, including macroeconomic stability, tax reforms, the Big Push Initiative, skills and entrepreneurship support, and the launch of a Women's Development Bank.
  • GCB Bank is expected to do more for MSMEs, with declining Treasury bill rates encouraging the bank to diversify its portfolio and extend more affordable credit to productive enterprises.
  • The Board Chairman of GCB Bank, Prof. Joshua Alabi, called for greater teamwork among the board, management, staff, and union, and disclosed plans for the bank to expand into regional markets with government backing.

Statistics:

  • MSMEs account for over 90% of businesses in Ghana.
  • MSMEs employ nearly 80% of the workforce.
  • MSMEs contribute about 60% to the national GDP.
  • Royalties, interests, dividends, and rents account for about 90 per cent of government revenue.
  • The Big Push Initiative has committed the cedi equivalent of US $10 billion to close infrastructure gaps.
  • Government has allocated over GHS564 million for skills and entrepreneurship support and an additional GHS410 million in 2025.
  • GCB Bank's half-year performance showed interest income of GHS2.79 billion and operating income of GHS2.7 billion.

Sources:

  • Ghana News Agency
  • The Deputy Minister of Finance's official statement
  • The Board Chairman of GCB Bank's official statement
  • The Trades Union Congress (TUC) website