The current development in the country’s economy and financial sector underscores the need for a timely and comprehensive financial education program that addresses noticeable issues in the financial sector.
As a result, the government, in collaboration with financial sector regulators and industry associations, is implementing the National Financial Education Campaign to strengthen Ghanaians’ financial capability and promote responsible financial behaviors.
The Deputy Minister for Finance, Madam Abena Osei-Asare made these remarks during the official launch of the National Financial Education Campaign Program today in Accra.
She noted that the Financial Education Campaign’s structure was very comprehensive.
She stated, “It is designed to allow for radio and TV discussions, public fora, town hall engagements and social media campaigns. Different educational materials have been developed and translated from English into 11 local languages, namely, Ga, Akwapim Twi, Asante Twi, Ewe, Sefwi, Nzema, Dagomba, Dagaare, Kusaal, Mamprugu and Gonjas.”
She also indicated that the Campaign would be conducted in the 16 regions of Ghana and predominantly targets the informal sector as well as youth groups.
The Deputy Minister noted that Ghana’s financial inclusion journey started in 2010 when a FinScope Survey was conducted.
“This survey estimated Ghana’s financial inclusion rate at 41 percent which subsequently increased to 58 percent in 2015 according to the Financial Inclusion Insight Survey.
“Further, the Government developed the National Financial Inclusion and Development Strategy (NFIDS) which sought to increase financial inclusion from 58 percent to 85 percent by 2023. The NFIDS is organized in five mutually reinforcing pillars of financial sector development namely financial stability; access, quality and usage of financial services, financial infrastructure, financial consumer protection and financial capability,” she stated.
Madam Osei-Asare indicated that the 2023 Financial Education Campaign was anchored on these priority pillars.
“The 5th pillar bolstering financial capability highlights the need to increase financial education on consumer awareness and understanding of financial products to enhance consumers’ ability to manage their finances. The government recognizes that informed customers help create a more competitive and efficient market,” she stressed.
She further pointed out that consumer financial capability was a major component in building a strong and resilient economy.
“Without this, many people will resort to the old and unsecured ways of handling monies, such as keeping monies under pillows and mattresses. Apart from the fact that these are unsafe methods of keeping money, these behaviors also deprive the financial sector of access to excess liquidity from individuals, households and businesses for economic development,” she added.
According to her, the financial incapability of Ghanaians has been identified as one of the contributing factors to the recent financial sector crisis that led to the lock-up of funds of many depositors and investors.
“The government spent over GHS25 billions of public funds to clean-up the sector and to bailout customers whose funds were locked-up with the defunct institutions.
“Despite the clean-up exercise, many financial consumers continue to use financial products and services without understanding the risks associated with these products nor the benefits thereof. The lack of deliberate financial literacy programs to educate Ghanaians on the operations of the financial sector, identification of Ponzi schemes and other illegal/fraudulent investment schemes are some of the many reasons why a vast majority of Ghanaians remain vulnerable to financial fraud,” she emphasized.
On his part, the Director of the Financial Sector Division of the Ministry, Mr. Sampson Akligoh, noted that the campaign’s design was a collaborative effort by financial sector regulators and industry associations.
He stated that the Ghanaian Financial Sector was in a considerable state of turmoil between 2015 and 2016 with the advent of many financial institutions that were undercapitalized and insolvent.
“Some of these institutions were not licensed to provide financial services to the public, as such they were operating illegally in the country,” he emphasized.
He indicated that the problem led to the loss of monies (deposits and investments) of many households and businesses as most of these institutions bolted with the hard-earned monies of their depositors and investors, adding that, it created a serious threat to the sector with possible spillover consequences for the rest of the economy.
“To prevent a full-blown financial crisis, the Government through the financial sector regulators between 2017 and 2019 embarked on a comprehensive reform agenda with the aim of ridding the financial sector off illegal, illiquid and insolvent financial institutions as well as to strengthen the regulatory and supervisory framework of the sector.
“Following from this, the Government with financing from the World Bank commissioned the Ghana Financial Sector Development Project to promote financial sector soundness and access to financial services by individuals. A key component of the project is the design and roll-out of a comprehensive financial education campaign to bolster the financial capability of Ghanaians and to promote responsible financial behaviors,” he added.
Patience Anaadem, ISD