After 10 years of successful adjustment, with real economic growth averaging 5 percent per year, Ghana's recorded savings and investment rates remain very low - even by sub-Saharan African standards. However, survey evidence suggests that actual savings and investment rates are much higher than recorded rates. National accounts statistics do not capture a large part of the underlying savings and investment activities of the household, rural, and informal sectors. Comparative financial indicators confirm that Ghana's financial system is not very deep and as a result not fully contributing to economic growth. Ghana's broad money holdings are small relative to GDP when compared to other countries with similar per capita income. Also, currency holdings are relatively large, suggesting that Ghanaians prefer cash to bank accounts. Meanwhile, the bulk of financial savings has financed public sector deficits, leaving little for private investment finance. There is considerable evidence that many household savings are invested in real assets yielding zero, or negative, returns. Widespread lack of trust in formal financial channels makes these nevertheless the preferred form of investment. Ghana can grow faster with existing savings by improving the efficiency of investments through enhanced finanical intermediation.
Details
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Author
Boehmer, Hans-Martin, Wetzel, Deborah, Gupta, Arvi
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Document Date
1995/04/01
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Document Type
Brief
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Report Number
23106
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2006/08/30
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Disclosure Status
Disclosed
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Doc Name
Le Ghana : rapprocher les investisseurs avec les epargnants
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Keywords
Savings; Investment; Households; Economic growth; Financial institutions; Public debt; Private investments; Savings behavior
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Citation
Boehmer, Hans-Martin Wetzel, Deborah Gupta, Arvi
Ghana : Bringing savers and investors together : Le Ghana : rapprocher les investisseurs avec les epargnants (French). Africa Region findings ; no. 38 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/986161468252580622/Le-Ghana-rapprocher-les-investisseurs-avec-les-epargnants