Bank lending is a major source of funding for businesses in Ghana. It helps pay for operational expenditure and investment in expansion of productive capacity. Therefore, it is important that there is substantial, affordable, and accessible financial credit for all businesses in the medium to long term. More than this, it matters which sectors of the country’s economy receive most of its bank credit.
In a recent study of the sectoral distribution of bank lending in Ghana, I found that for two and a half decades, bank lending to the agricultural and manufacturing enterprises has been in sharp decline.
In the 25 years from 1999 to 2023, the share of total bank credit that went to the agricultural and manufacturing sector fell by about 65% and 56% respectively. For instance, in 1999, about 25% of total bank lending went to manufacturing businesses. By 2023 however, that figure had fallen to about 11%.
