Ghanaians are unable to save because of the low salaries they earn.
There is a saying, “make hay while the sun shines.” It is why people try their best to set aside some money for future or emergency use.
However, with the meagre salaries many workers receive, coupled with the high cost of living, from food and transportation to rent, most incomes cannot even sustain basic upkeep until the next payday.
This has left many cash-strapped and unable to save.
Speaking on GhanaWeb TV’s BizTech, hosted by Ernestina Serwaa Asante, economist Professor Godfred Bokpin said Ghanaians are unable to save because of the low salaries they earn.
He further explained that the country’s economic structure does not empower citizens to save.
As a result of limited local capital accumulation, government often resorts to external borrowing to fund development projects.
“Even now, with the minimum capital, Ghanaians are visibly absent because they are not saving. Salary levels are very low, and it’s very common everywhere. Look, any country that has not empowered its citizens to save is not accumulating capital. That country cannot finance its own development,” the economist told BizTech.
He continued, “And that is why, every day, a president will go to China, Japan, and elsewhere to bring in capital. Because we are not building capital here. So the limited economic opportunities we have, we can’t take advantage of them.”
Professor Bokpin added that Ghanaian businesses are unable to compete due to a lack of capital, which has allowed foreign nationals to dominate the retail market.
He stressed that it is time SMEs are better structured through joint ventures and partnerships with foreign investors.
This, he noted, would allow local businesses to benefit from advanced technologies and remain competitive.
Watch the latest edition of BizTech below:
SA/MA