The Country Diagnostic for Ghana

This document summarizes the outcomes of the Ghana long-term finance country-diagnostic undertaken under the auspices of the Long-Term Finance Initiative hosted by the African Development Bank (AfDB). The diagnostic was carried out between June 2019 and March 2020 and summarizes the main findings and recommendations. It focuses on four key areas: (i) Macro, banking and capital markets; (ii) Enterprise finance; (iii) Infrastructure finance; (iv) Housing finance

The emphasize of this report is primarily on deepening the domestic market for long-term finance. Although deepening domestic markets is a medium- to long-term endeavor, it is fundamental both to enhancing domestic saving and the efficient deployment of scarce domestic resources, and to reducing exposure to potential foreign exchange risks. Developing economies such as Ghana will continue to rely on foreign capital resources as an important source of investment financing for the foreseeable future. However, strengthening the domestic financial system—particularly the enabling environment and institutional infrastructure, will be important in two main ways: in gradually increasing the depth of local markets and reliance on domestic funding sources, and in attracting foreign sources of capital, such as foreign direct investment and portfolio investments.