Professor Peter Quartey is the Director of ISSER

The Director of the Institute for Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has observed that Ghana’s taxes are too high, creating opportunities for evasion and abuse of the system.

He noted that the current tax structure, particularly the Value Added Tax (VAT) system, places a heavy burden on businesses and hampers effective revenue collection.

According to him, the system disproportionately benefits the wealthy while overburdening the poor.

Speaking at the Graphic Ecobank Economic Forum, Professor Quartey said, “Our tax levels are too high, in my view. Our VAT is over 21%. Some are even straight levies on which you cannot claim input tax. But look at our competitors, on average, they pay 15% or 18%, and we are charging more than 21%. What this does is encourage people to evade taxes,” he warned.

“When your taxes are too high, you encourage tax evasion. You end up enriching customs officials and businessmen, while the government continues to struggle to raise revenue,” he emphasised.

He further pointed out that the problem is exacerbated by the largely informal nature of Ghana’s economy, which makes it difficult to track and penalise tax evaders.

“Over 80% of our economy is informal. We have not developed an effective mechanism to tax the informal sector. All we do is focus on the 20% in the formal sector. Why should we overtax this 20% while ignoring the 80%?” he questioned.

On the issue of broadening the tax net, he stressed the need for government to implement practical strategies to bring the informal sector into the tax fold.

“We need to take a critical look at this. Otherwise, we will not make significant progress in tax revenue mobilisation, and that’s why we keep borrowing. We’re not raising enough revenue,” he added.

SSD/MA

play videoPlayers of the Black Stars before a game

It’s derby day in Brentford as the Black Stars of Ghana lock horns with the Super Eagles of Nigeria in the semifinals of the 2025 Unity Cup.

The match, taking place at the GTech Community Stadium, promises fireworks as two of Africa’s greatest footballing nations renew their rivalry.

Ghana, led by captain Jordan Ayew, have named a youthful but determined starting XI, with several exciting debutants aiming to make a statement on the big stage.

Despite missing key names like Mohammed Kudus and Thomas Partey, Otto Addo’s side will be fired up to get past their West African rivals and book a place in the final.

Nigeria, missing stars like Victor Osimhen and Ademola Lookman, still boast a strong lineup featuring Wilfred Ndidi, Samuel Chukwueze, and Frank Onyeka.

With history, pride, and a spot in the final on the line, tonight’s game is set to deliver all the drama of the famous Jollof Derby.

Watch and follow live updates of the game below:

FKA

Meanwhile, here is why Chairman Wontumi has been served with Exim Bank suit

President John Dramani Mahama has endorsed Margins ID Group and applauded its Chief Executive Officer (CEO), Moses Kwesi Baiden Jr, for the pioneering role in reshaping Ghana’s digital identity landscape through the Ghana Card.

Speaking at the 9th Ghana CEO Summit in Accra last Monday, the President highlighted how the Ghana Card had become much more than just an identity card (ID), saying it had become the backbone of a digitally sovereign and competitive economy.

Before the President mounted the podium to deliver the keynote address, the CEO of Margins ID Group had delivered his perspectives on digital ID in a presentation titled, “Digital Identity for Business and Economic Empowerment”.

President Mahama said other African nations, including the Democratic Republic of the Congo, were looking to replicate Ghana’s model.

“I recently received a request from the DR Congo asking for a reference on Moses and the Ghana Card system,” the President said.

“They wanted to know if they had done a good job.

I said, yes, they did,” the President declared.

He pointed to practical innovations such as the planned reintroduction of road tolls, which would be facilitated by the Ghana Card.

“Every vehicle is now linked to its owner’s Ghana Card.

We no longer need old tolls and those cards that you stand and open and all that.

We just take a picture of your car, and then it would take the bill to your mobile money or your bank accounts and just pay one cedi,” the President disclosed.

Real-time integration

Explaining the real-time integration of the Ghana Card with key government systems such as that of the Driver and Vehicle Licensing Authority (DVLA), Mr Baiden said: “You can input your national ID, conduct biometric verification, and within 300 milliseconds, your data is reflected in the DVLA database.”  

That means that anyone who buys a vehicle will be registered in their names only and nobody else, as the owner’s driver’s licence will be connected to their real ID, whether they register remotely or in person.

“When you are stopped, with or without your driver’s licence, you can be identified as the owner of the car, we can know whether your driving licence has expired, we can know whether your insurance has expired and we can certainly know whether the car you are driving is yours,” Mr Baiden stated.

The Margins ID Group CEO described the Ghana Card as the “infrastructure of trust” needed for modern governance, economic growth and social inclusion. 

Health

In the health sector, Mr Baiden explained that babies were now being issued with national ID numbers at birth.

“The National Health Insurance Authority can now bridge data gaps, eliminate fraudulent claims and enable targeted healthcare planning. Medical records will be securely stored in the cloud, accessible in emergencies through credentialed doctors, saving lives and improving service delivery,” he stated.

Mr Baiden said the transformation also extended to national security, where “the police, immigration, and intelligence services can now generate and act on instant search lists, locally developed, allowing real-time tracking of suspects across borders”.

He said the system could verify identities with or without the physical card, using only fingerprints, stressing, “The days of unidentified victims in mortuaries are behind us.”

PPPs

Mr Baiden reinforced the critical role of public-private partnerships.

“Since 2012, the Margins-led PPP has enabled Ghana to build and maintain a robust identity infrastructure at scale.

This is not theoretical. It is a living, functioning ecosystem of governance, built in the interest of Ghanaians and used every day by both the public and private sectors.”

He called for digital sovereignty, saying the country could not merely consume foreign technology.

“We must build, innovate and shape our destiny.

The Ghana Card is not just a card; it is the engine of transformation, a gateway to inclusion and a testament to what Ghana can achieve when we apply our intelligence and vision in service of generations yet to be born.”

Dr Johnson Pandit Asiama is the BoG Governor

The Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, has cautioned individuals hoarding dollars in anticipation of a depreciation to release them.

He explained that the cedi is currently on a path of strengthening and is unlikely to return to its previous pattern of depreciation.

According to him, the economic fundamentals that influence the currency’s direction are now moving in Ghana’s favour, contributing to the cedi’s stability.

Speaking at the Private Investor Roundtable during the AfDB Annual Meetings, Dr. Asiama stated, “To those still holding dollars in anticipation of a return to old patterns of depreciation, I will say this plainly; The market has changed. The narrative has changed. And the policy environment has changed. The cedi’s performance is not an illusion; it is a reflection of real reforms, real discipline, and real resilience.”

He also emphasised that the Central Bank is closely monitoring developments and is committed to maintaining the recent gains.

“Even as we remain vigilant, we believe the cedi is entering a new phase of anchored stability. Yes, global dynamics, including a possible rebound in the U.S. dollar or a decline in gold prices, could soften external support. But Ghana’s domestic policy stance is strong enough to cushion such shifts.

“Consider this; inflation is declining, reserves are rising, fiscal policy is tightening, and real sector growth is holding steady. These are the fundamentals that guide currency markets, and they are now moving in Ghana’s favour.

“We are also enforcing foreign exchange market regulations more rigorously. The days of unmonitored FX transactions, speculative arbitrage, and opaque flows are behind us. We are building a market where FX pricing is fair, flows are transparent, and capital is respected,” Dr Asiama concluded.

SSD/MA

Accra, May 28, GNA- The Government has assured mining companies in the country of stable power supply to boost productivity and contribute to sustainable economic development.  

The provision of reliable and affordable power is expected to enhance the operations of mining firms and avoid interruptions to their operations due to high dependency of their machinery on power.  

Mr John Jinapor, Minister of Energy and Green Transitions, gave the assurance at the opening of the 18th Edition of the West African Mining and Power Exposition Conference (WAMPEX) in Accra on Wednesday.  

More than 5,000 registered delegates and 220 exhibitors from 30 countries are participating in the three-day event on the theme: “Driving sustainable investment opportunities in West Africa.”  

Mr Jinapor said the mining and energy sectors were the backbone of global development and that power fluctuations in those sectors could affect production, safety and profitability.  

The Minister said recent reports indicated that power generation had been stable, adding that measures were underway to ensure transmission efficiency.  

In that regard, Mr Jinapor announced that he had granted approval to the Electricity Company of Ghana (ECG) to inject 200 new transformers in major capital cities in the country to enhance transmission efficiency.  

“I’ve granted approval to ECG as a matter of urgency to inject about 200 new transformers in our major capital cities in order to ensure that we do not just generate power, but we are able to transmit that power and distribute that power to consumers in an effective and efficient manner”, he said  

Mr Jinapor said drilling activities along Ghana’s offshore basin had begun as part of policy actions that would revitalise and ensure regulatory certainty and predictability for investors in the power and petroleum sector  

“The government has embarked on a couple of policy actions grounded around to ensure that there’s regulatory certainty, predictability for investors in both the power and petroleum sector,” he added.  

Mr Emmanuel Armah Kofi Buah, the Minister for Lands and Natural Resources, said the global energy transition and climate action had informed the need to rethink traditional mining extraction models.  

He said the $1.2 billion foreign direct investment recorded in Ghana’s mining sector last year was an indication that the policies the Government had put in place had boosted investor confidence.  

“With decades of commercial mining experience that has made Ghana Africa’s largest gold producer and a top 10 global supplier, we have learned that true wealth lies not just in what we take from the earth but in how we develop it,” Mr Buah said.  

Mr Michael Edem Akafia, President, Ghana Chamber of Mines, said sustainability must be at the centre of mining operations and emphasised the need for long-term survival and viability of the mining sector without compromising the environment.  

He urged players in the sector to develop the supply value chain by strengthening capacity to ensure effective local participation.  

Mr Akafia said the Chamber fully supported the Government’s newly-created Gold Board and pledged to support its successful operationalisation.  

GNA 

Christian Akorlie 

Godfred Dame, former Attorney General and lead counsel for suspended Chief Justice Gertrude Araba Torkornoo, has strongly criticized the ongoing removal proceedings against his client, arguing that they are fundamentally flawed and violate constitutional principles.

Speaking to journalists on Wednesday, May 28, outside the Supreme Court in Accra, Mr. Dame emphasized that due process and the rule of law must be upheld in Ghana.

His remarks followed a string of legal setbacks for the Chief Justice, including the Supreme Court’s unanimous dismissal of her injunction application against a five-member committee probing the petitions for her removal. Earlier that day, the Court also struck out her supplementary affidavit.

Despite mounting pressure from some quarters for the Chief Justice to resign, Dame made it clear that resignation is not being considered.

“It is not on the account of people putting pressure on the Chief Justice to resign or do whatever that we will take any decision. The most important thing is that there must be an upholding of the rule of law in Ghana. And we continue to assert our rights,” he asserted.

He insisted that his client, a seasoned judicial figure, is not seeking sympathy but rather adherence to legal and constitutional norms.

“The proper thing must be done. As far as I’m concerned, the correct thing must be done… She knows what is due process. She knows what is constitutional rights, and I think that’s what she’s asking for,” he added.

Gertrude Torkornoo, on May 21, filed an application at the Supreme Court seeking to restrain a committee set up by President John Mahama to investigate petitions seeking her removal from office.

In the suit, she requested an interlocutory injunction to halt all proceedings of the committee, pending the final determination of the case.

However, the Supreme Court on Wednesday, May 28, unanimously dismissed the injunction application filed by suspended Chief Justice.

Supreme Court unanimously dismisses Torkornoo’s injunction application

…..

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President John Dramani Mahama

President John Dramani Mahama has unveiled a bold new initiative aimed at transforming Ghana’s economic future: the Volta Lake Economic Corridor.

The announcement came during a multi-sectoral stakeholder engagement at the Jubilee House focused on the implementation of the 24-hour economy policy.

Mahama described the Volta Lake as the future epicentre of Ghana’s national production zone and logistics network.

The corridor, he said, will unlock the potential of more than 2 million hectares of arable land along the lakeside for agricultural production, revitalising the fisheries sector and supporting the creation of new industrial parks.

“Volta Lake will no longer be just a water body,” President Mahama declared.

“It will be a strategic transport highway – efficiently moving food, goods, and people – and easing the pressure on our overstretched road infrastructure.”

Key components of the initiative include the deployment of new floating assets, the construction of modern lake ports, and the formation of long-term investment partnerships with the Volta River Authority and private sector investors.

These efforts, Mahama said, will help create thousands of jobs and support the government’s broader push for round-the-clock economic activity.

The Volta Lake Economic Corridor is a flagship project under the wider 24-hour economy agenda, which seeks to boost productivity and employment through continuous operations in key sectors.

Mahama indicated that priority value chains will be identified in each region, spanning agro-processing, pharmaceuticals, textiles, light manufacturing, tourism, digital services, and the creative economy.

Former Attorney General and Minister for Justice, Betty Mould-Iddrisu, says that menstruation is neither a curse nor a taboo that should prevent girls from accessing education.

Speaking on behalf of the Vice President, Prof. Jane Naana Opoku-Agyeman, in commemoration of Menstrual Hygiene Day 2025, she emphasised the urgent need for access to free sanitary products, increased awareness, and empowerment for girls, describing it as “a compelling call for all of us.”

She reaffirmed the government’s full commitment to dismantling the social and economic barriers that menstruating girls face.

“That’s why, in a bold and necessary step, the government has launched the Free Sanitary Pads Programme, to help girls manage their periods with dignity,” she said.

In commemoration of Menstrual Hygiene Day 2025, a powerful new documentary titled “Barred by Blood: The Cultural Chains Holding Back Girls in Kyekyewere” was screened at the British High Commissioner’s Residence in Cantonments, Accra on May 27, 2025.

The event, organised through a collaboration between the Government of Ghana, the British High Commission Accra, and the United Nations Population Fund (UNFPA), brought together stakeholders in health, education, gender advocacy, and the diplomatic community to confront the challenges facing girls due to deep-rooted menstrual taboos.

The documentary spotlights the deeply rooted cultural practices in Kyekyewere that isolate and marginalise young girls during menstruation, practices that affect their education, self-esteem, health, and reduce stigma across Ghana.

The Minister for Gender, Children and Social Protection, Dr. Agnes Naa Momo Lartey, in an interaction with journalists, commended President John Dramani Mahama for the launch of the ‘Free Sanitary Pad Initiative.’

She described the initiative as a timely and impactful measure to guarantee access to sanitary pads for all girls.

According to her, this intervention is crucial in curbing the disturbing practice of “sex for pads” and safeguarding the rights and dignity of young girls.

The Member of Parliament for Upper Denkyira East, Emelia Ankomah Esq. also addressing the media, emphasised the urgent need to break the silence around menstruation and ensure that no girl is held back by natural biological processes.

She expressed her concern over the incident involving the girls and stated that she would engage relevant members of the community to determine the best course of action.

Menstrual Hygiene Day, observed globally on May 28, seeks to raise awareness and advocate for the dignity and rights of girls and women.

This year’s event in Ghana highlights the role of storytelling and community engagement in transforming harmful cultural norms.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

Dr David Tetteh is a pharmacists’ representative on the NHIA Governing Board

The Directorate of Health of the NDC Professionals Forum has congratulated pharmacist and marketing expert, Dr David Tetteh, following his appointment as the pharmacists’ representative on the Governing Board of the National Health Insurance Authority (NHIA).

In a statement issued by the Directorate on Wednesday, May 28, 2025, Dr Tetteh’s appointment was described as not only a significant personal achievement but also a moment of collective pride for the pharmaceutical community and all stakeholders dedicated to advancing healthcare delivery in Ghana.

“This appointment is not only a significant personal milestone, but also a moment of pride for the entire pharmaceutical community and all stakeholders committed to quality healthcare delivery in Ghana. It is a clear and well-deserved recognition of your many years of dedicated service, professional excellence, and unwavering commitment to improving the pharmaceutical sector,” the statement noted.

The Directorate also commended Dr Tetteh’s longstanding contributions to the NDC Professionals Forum.

“Your impact within the NDC ProForum is well known. As a pioneering member of the Pharmacist Forum, you played an instrumental role in the success of our maiden Health Conference, an event that laid the foundation for sustained professional collaboration and policy engagement. Equally important is your ongoing mentorship of young pharmacists, which continues to inspire and build capacity within the profession.”

The Directorate reaffirmed its support for Dr Tetteh and expressed its readiness to collaborate with him throughout his tenure on the NHIA Board.

“We are confident you will serve with distinction and make a lasting impact,” the statement added.

Dr Tetteh’s appointment by President John Dramani Mahama forms part of a broader strategy to enhance the efficiency and sustainability of Ghana’s national health insurance system.

JKB/MA

Speaker condemns Parliamentary misconduct, cautions against repetition

President John Dramani Mahama

President John Dramani Mahama has assured Ghanaians of the Bank of Ghana’s commitment to maintaining the exchange rate within a realistic and sustainable range.

According to him, the Governor of the central bank and his team are closely monitoring the situation and are prepared to intervene if the exchange rate drops below expected levels.

He urged those currently holding foreign exchange not to panic or fear a loss in value.

“I don’t envisage, as some people are saying, that the rate will drop to one cedi to the dollar. No, that’s extreme. That would virtually collapse our export sector if it happens. But I believe the Governor of the Bank of Ghana is keeping a close eye on the situation. If it falls below a certain floor, I’m confident the Bank will intervene to ensure it remains within a band that reflects the true value of the cedi against other currencies,” President Mahama said.

He added, “So don’t panic. And if you haven’t yet exchanged your dollars, I don’t know how much further down it will go, but the Governor is monitoring things closely, and we’ll see how it unfolds.”

Ghana’s local currency has been appreciating on the interbank market in recent weeks and is currently trading below GH¢11 to the US dollar.

President Mahama attributed the recent gains of the cedi to coordinated fiscal and monetary policies implemented by the Bank of Ghana and the Ministry of Finance.

“The recent appreciation of the cedi is the result of close coordination between fiscal and monetary policies by the central bank and the Ministry of Finance,” he noted.

He further explained the mechanisms underpinning the cedi’s strength, “It’s based on the forex auction system and the dynamics of demand and supply. The Bank of Ghana conducts a forex auction to determine how much cedis in the system require foreign exchange for payments. Those who need forex place bids in the auction.

“The Bank then strikes an average, collects the cedis, and allocates the corresponding dollars. So, it’s not that someone is artificially forcing the dollar down. The current rate reflects the results of the auction and market demand. I believe the rate will settle where the true value of the cedi lies, based on supply and demand,” he concluded.

SSD/MA

Objective 

This report provides a data-driven projection of the USD to GHS exchange rate for the year 2025. It offers insights into recent trends, economic drivers, technical indicators, and macroeconomic expectations, serving as a reliable guide for stakeholders in trade, finance, and policy formulation. 

Executive Summary 

The Ghanaian Cedi (GHS) has shown a notable recovery against the United States Dollar (USD) in recent months, driven by significant structural adjustments, monetary discipline, and external sector performance.  

As of May 24, 2025, the GHS appreciated by 8.891% on a weekly basis, with the interbank mid-rate reaching 11.07 GHS/USD.  

This appreciation reflects investor confidence following Ghana’s successful debt restructuring, improved commodity exports, and decisive interventions by the Bank of Ghana. 

 On an annual basis, the cedi is projected to appreciate by approximately 28.94% in 2025 compared to its average rate in 2024, underscoring a strong recovery trajectory and sustained macroeconomic stability.  

GITFiC projects an average USD/GHS exchange rate of 10.02 for 2025, within a range of 7.09 to 13.16. The cedi is expected to maintain relative strength through Q2 2025, although volatility remains a risk due to domestic import demand and potential shifts in global monetary policy. 

 Current Exchange Rate Dynamics and Recent Trends 

Spot Rate (May 26, 2025): 1 USD = 11.11 GHS (mid-market). 

Trend: The cedi has appreciated significantly from its weakest position of 16.44 GHS/USD in late 2024. 

Performance Drivers: 

They are Debt restructuring success (including bilateral and multilateral agreements), Firming commodity prices (especially gold, cocoa, and crude oil), Reduced speculative activity in forex markets, and Central bank liquidity interventions and monetary stability. 

Historical Exchange Rate Averages 

2009–2025 Average: 1 USD = 5.345 GHS, 2020: 5.6 GHS, 2022: 8.4 GHS, 2023: 11.2 GHS, and 2024: 14.1 GHS  

Factors Driving the Cedi’s Appreciation 

The following economic and financial factors have contributed to the recent and projected appreciation of the GHS: Macroeconomic Fundamentals, Debt Sustainability Improvements: The Government of Ghana’s successful debt restructuring, including a $5.4 billion bilateral agreement and a $3 billion IMF-supported programme, has improved market confidence and fiscal space, Fiscal Reforms and Consolidation: Reduction in primary deficits and enhanced revenue mobilization have improved macroeconomic indicators. 

Others are Commodity Export Earnings: Ghana’s trade position has been supported by steady or rising prices of gold, cocoa, and oil.  

Notably, gold reserves increased from 22.3 to 31.2 tonnes by April 2025, boosting foreign exchange supply. 

Monetary Policy Response 

Foreign Exchange Intervention: The Bank of Ghana injected over $490 million into the forex market to stabilize the cedi, alleviating short-term demand pressure. 

Policy Rate Stability: The benchmark monetary policy rate has been maintained at 28%, reinforcing price stability and anchoring inflation expectations. 

Exchange Rate Mechanism: Daily exchange rates are determined using a weighted median of interbank forex market transactions, enhancing transparency and efficiency. 

Technical and Quantitative Forecasting Indicators 

GITFiC’s forecasting model integrates fundamental analysis with technical indicators and econometric inputs: 

 Moving Averages 

50-Day Simple Moving Average (SMA): Currently at 12.83 GHS/USD, indicating the cedi remains in a strengthening phase. 

200-Day SMA: At 14.53 GHS/USD, showing a reversal from long-term depreciation trends. 

Relative Strength Index (RSI) 

14-day RSI: At 90.13, the cedi is in overbought territory, suggesting a possible short-term correction; however, long-term indicators remain positive. 

Volatility Metrics 

30-Day Volatility: 6.31%, down from 7.43% in 2024. This reflects growing market confidence and reduced forex market speculation. 

The GITFiC 2025 Exchange Rate Forecast 

Projection Summary: 

Period USD/GHS Rate (Range) Cedi to USD Equivalent 

Annual Average 10.02 GHS $0.099 per GHS 

Full Year Range 7.09 – 13.16 GHS $0.076 – $0.141 per GHS 

Quarterly Outlook 

Q1–Q2 2025: 

Estimated range: 9.00 – 11.76 GHS/USD 

The cedi is expected to retain resilience due to IMF disbursements, increased gold reserves, and fiscal discipline. 

Q3–Q4 2025: 

Estimated range: 7.09 – 10.50 GHS/USD 

Continued reforms and commodity earnings could drive further appreciation, but risks remain from global monetary tightening and seasonal import pressures. 

Risks and Volatility Factors 

Despite the cedi’s bullish momentum, the following risks could introduce volatility: 

Import Demand Pressure: High domestic import requirements, especially for refined petroleum, machinery, and food, may exert pressure on the cedi. 

Inflation: Although headline inflation has moderated from the peak, persistent core inflation above 20% could limit monetary policy flexibility. 

Global Monetary Conditions: Potential delays in rate cuts by the U.S. Federal Reserve may strengthen the USD globally, reversing some gains for emerging market currencies. 

External Sector Shocks: Commodity price fluctuations or geopolitical tensions may impact Ghana’s trade and capital inflows. 

Political Stability and Reforms: Post-election implementation of fiscal and structural reforms will be critical to sustaining macroeconomic stability. 

The GITFiC Recommendations for Stakeholders 

Policymakers: Should prioritize structural reforms, domestic revenue mobilization, and diversification of export base to reduce cedi vulnerability. 

Businesses: Must adopt hedging strategies against currency risks, particularly those with high foreign exchange exposure. 

Investors: Should consider medium- to long-term opportunities in GHS-denominated assets, especially in government bonds and real sectors aligned with export expansion. 

Development Partners: Must continue technical and financial support for Ghana’s reform agenda, with a focus on debt sustainability and inclusive growth. 

Conclusion 

GITFiC’s analysis suggests that the Ghanaian Cedi will continue its trajectory of recovery in 2025, supported by robust macroeconomic and technical indicators.  

While short-term corrections are possible due to market dynamics, the overall outlook is one of cautious optimism.  

Strategic policy implementation and external stability will be essential to maintaining the cedi’s strength throughout the year. 

By Isaac Osei Owusu 

Lead Analyst, Research, Advocacy and Policy  

By Louis Gyimah 

Executive Summary

The implementation of individual consumer credit scoring systems represents a transformative force in Ghana’s financial sector, reshaping lending practices and expanding financial inclusion. This analysis explores the multifaceted economic impact of credit scoring on financial institutions, businesses, and individual consumers. Drawing comparisons with similar economies, it highlights the system’s role in understanding broader economic implications and potential future trajectories.

Introduction

Ghana’s evolving financial landscape has been significantly influenced by credit scoring initiatives such as myCreditScore. With mobile money penetration exceeding 22 million users, the country is embracing data-driven lending. The transition from collateral-based to behavior-based credit assessments holds profound economic implications for institutional lending, consumer borrowing, and broader economic stability.

Theoretical Framework

Economic Theory of Information Asymmetry

Pioneering work by Akerlof, Spence, and Stiglitz on information asymmetry underpins the rationale for modern credit scoring. Their Nobel Prize-winning research demonstrates how structured credit assessments reduce adverse selection and moral threats in lending markets and enhance market efficiency.

Financial Inclusion Theory

The World Bank’s financial inclusion framework identifies credit scoring systems are a key enabler of economic participation. This is particular in developing economies with low traditional banking penetration but high digital financial engagement.

Impact Analysis: Ghana

Quantitative Market Transformation

Recent data from my CreditScore’s pilot program demonstrates significant market impact. The program has facilitated 40,791 credit disbursements with a total value of GHS 637,799.82. The system has achieved a remarkably low default rate of 2.51% and a non-performing loan rate of 3.44%.

These metrics demonstrate improved risk assessment and management capabilities.

Economic Multiplier Effects

Research by the University of Ghana Business School highlights several positive economic benefits from improved credit access through scoring systems:

• Increased business formation due to accessible credit
• Enhanced SME growth trajectories
• Higher employment rates as businesses expand
• Reduced dependence on informal lending in urban and peri-urban areas

Comparative Analysis with Other Markets

Kenya’s Mobile Credit Revolution

Kenya’s integration of credit scoring through M-Shwari has revolutionized the microfinance landscape. Access to micro-loans has increased by 70% since implementation, while loan processing costs have decreased by half. Formal credit participation has more than doubled, creating a more inclusive financial ecosystem.

India’s MSME Transformation

India’s implementation of comprehensive credit scoring has transformed its MSME sector. Lending to micro, small, and medium enterprises has increased by 35% since implementation. Default rates have decreased by 45% through better risk assessment. Loan processing efficiency has improved by 60%, reducing the time and cost of credit access.

Brazil’s Inclusive Growth Story

The Brazilian credit scoring system implementation has demonstrated remarkable success in financial inclusion. Credit access for lower-income segments has increased by 40%. Interest rates for borrowers with good scores have decreased by 25%. Risk assessment accuracy has improved by 55%, leading to more stable lending markets.

Economic Impact Categories

Financial Sector Efficiency

• Lower transaction costs and more precise risk assessment
• Optimized capital allocation through data-driven lending
• Reduced loan loss provisions among financial institutions through better risk management

Business Growth Impact

• Higher SME lending volumes due to credit transparency
• Improved business survival rates
• Increased market competition and formal sector participation as businesses transition from informal financing

Consumer Welfare Enhancement

• Lower borrowing costs for individuals with good credit histories
• Expanded access to credit across demographic segments
• More stable consumption patterns through improved financial planning

Macroeconomic Effects

GDP Growth and Economic Activity

Studies by the African Development Bank estimate that comprehensive credit scoring could add up to 2% annual GDP growth in Ghana through formal sector expansion and increased lending velocity.

Financial System Stability

The Bank of Ghana reports that institutions using credit scoring experience approximately 40% lower NPL rates, enhancing overall financial sector resilience. The central bank’s monetary policy transmission has thus become more effective as the formal lending sector expands.

Policy Implementation Framework

Regulatory Architecture

The Bank of Ghana has established a robust regulatory framework for credit reporting and scoring.

• Credit Reporting Act (2007, Act 726): Legal foundation for credit information sharing
• Data Protection Act (2012, Act 843): Ensures consumer privacy
• Ongoing regulatory updates for emerging technologies

Technological Infrastructure Development

Ghana’s digital financial infrastructure has evolved significantly to support credit scoring systems.

• GhIPSS: Supports payment data collection
• Mobile money operators: Provide alternative credit data
• Ghana Card: Facilitates identity verification

International Best Practices and Adaptation

U.S. FICO Model

The U.S. FICO scoring system demonstrates the long-term economic benefits of standardized credit scoring:

• Annual GDP contribution estimated at 2.5%
• Consumer lending volume increase of $1.9 trillion over 20 years
• Average credit access cost reduction of 15-20%
• Lending decision time reduction by 85%

Singapore’s Digital Credit Infrastructure

Singapore’s credit scoring system shows how technology integration can enhance effectiveness:

• Real-time credit decision capability
• Cross-border credit score portability
• Integration with national digital identity
• Automated fraud detection systems

Future Projections for Ghana

Economic Growth Potential

World Bank and IMF projections indicate substantial growth potential through improved credit scoring:

• Formal lending market expansion of 30-35% annually
• Reduction in average lending costs by 25-30%
• SME sector growth acceleration by 15-20%
• Financial inclusion improvement by 40-45%

Market Development Opportunities

• Integration of alternative data sources (utility bills, mobile transactions)
• AI-driven credit scoring models
• Cross-border credit score recognition
• Sector-specific credit scoring models

Implementation Challenges and Solutions

Data Quality and Availability

• Challenges: Limited historical data, informal sector transactions, standardization issues
• Solutions: Incentivizing digital transactions, standardizing credit reporting, regional data sharing

Technical Infrastructure

• Needs: Real-time processing, cybersecurity, system interoperability
• Proposed Enhancements: Upgrading digital identity integration, ensuring data security

Conclusion

The transformation of Ghana’s credit market through modern scoring systems represents a crucial case study in financial development. The evidence from both domestic implementation and global benchmarks suggests substantial economic benefits are achievable through continued development of credit scoring infrastructure.

A balanced approach—leveraging technology, regulatory frameworks, and market innovation— while maintaining focus on consumer protection and financial inclusion objectives will be key to sustaining long-term benefits.

Ghana’s experience can serve as a model for other developing economies, seeking to enhance their financial infrastructure and promote inclusive economic growth.

President John Dramani Mahama

President John Dramani Mahama has unveiled a bold new initiative aimed at transforming Ghana’s economic future: the Volta Lake Economic Corridor.

The announcement came during a multi-sectoral stakeholder engagement at the Jubilee House focused on the implementation of the 24-hour economy policy.

Mahama described the Volta Lake as the future epicentre of Ghana’s national production zone and logistics network.

The corridor, he said, will unlock the potential of more than 2 million hectares of arable land along the lakeside for agricultural production, revitalising the fisheries sector and supporting the creation of new industrial parks.

“Volta Lake will no longer be just a water body,” President Mahama declared.

“It will be a strategic transport highway – efficiently moving food, goods, and people – and easing the pressure on our overstretched road infrastructure.”

Key components of the initiative include the deployment of new floating assets, the construction of modern lake ports, and the formation of long-term investment partnerships with the Volta River Authority and private sector investors.

These efforts, Mahama said, will help create thousands of jobs and support the government’s broader push for round-the-clock economic activity.

The Volta Lake Economic Corridor is a flagship project under the wider 24-hour economy agenda, which seeks to boost productivity and employment through continuous operations in key sectors.

Mahama indicated that priority value chains will be identified in each region, spanning agro-processing, pharmaceuticals, textiles, light manufacturing, tourism, digital services, and the creative economy.

Daniel Kwadwo Owusu receiving the award from President John Mahama

The Country Managing Partner of Deloitte Ghana, Daniel Kwadwo Owusu, has been honoured as the Best CEO in the Consulting or Professional Services Sector at the 9th Ghana CEO Summit and Expo.

This prestigious recognition was awarded for his outstanding leadership, innovation, and exceptional contributions to the consultancy industry in Ghana.

“Your achievements and leadership in your sector have been remarkable, and this award serves as national recognition of your business excellence and dedication,” the citation from the Ghana CEO Network read.

“We are honoured to celebrate your contributions alongside other distinguished leaders across industries,” it added.

Under Owusu’s leadership, Deloitte Ghana has undergone significant transformation across its various service lines, Audit & Assurance, Tax & Legal, Consulting, Risk Advisory, and Financial Advisory, adopting a 360-degree approach to delivering seamless, integrated solutions.

Commenting on the achievement, Owusu expressed excitement and pride in both the recognition and the Deloitte brand.

He pledged to continue leading and empowering a team full of talent, skill, and creativity.

He emphasised that Deloitte is composed of extraordinary professionals who work on impactful projects that generate tangible and positive outcomes for society.

“The firm’s key differentiator is its innovation and the distinct, high-quality services that set it apart in the marketplace,” he added.

The 2025 Ghana CEO Summit was themed: “Leveraging Ghana’s Economic Reset: Transforming Business and Governance for a Sustainable Futuristic Economy.”

The summit served as a high-level private-public sector dialogue platform, fostering leadership development and strategic business insights.

SSD/MA

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