The CEO of the Association of Ghana Industries, Seth Twum Akwaboah, has warned banks and financial institutions in the country of the dangers of overreliance on government securities.
He believes that the recent domestic debt exchange should serve as a wake-up call for these institutions to diversify their lending portfolios.
Mr. Akwaboah stated that the government should not create conditions that encourage banks to invest more in government securities instead of lending to industries.
He added that banks should have a balanced portfolio of lending, including government bonds, but warned against making these investments overly attractive and portraying them as completely risk-free.
He hopes that the recent debt treatment will serve as a lesson for financial institutions and that they will begin to lend more to businesses and industries in the future.
He emphasized that although the returns from such investments may not be immediate, lending to businesses in the medium to long-term will ultimately benefit the economy.
Mr. Akwaboah further stressed the importance of a more balanced and diversified lending portfolio for financial institutions in Ghana, and called for government intervention to encourage lending to businesses and industries.
