Ghana Forex Stability: Industrial Productivity as the True Anchor, Says Fidelity Bank Deputy MD

In a pivotal address at the 14th Ghana Economic Forum, Fidelity Bank Ghana’s Deputy Managing Director for Wholesale Banking, Kwabena Boateng, highlighted the critical role of industrial productivity in securing Ghana’s foreign exchange (forex) stability. Moving beyond traditional reserves, he advocated for a “gardening” approach to lending—fostering growth in key sectors like agriculture and manufacturing—to drive sustainable economic resilience.

Introduction

Ghana’s economy has shown promising signs of recovery, with GDP growth reaching 6.3% in the second quarter and inflation stabilizing at a single-digit 9.4%. Yet, challenges in forex stability persist, underscoring the need for strategic investments in productive sectors. At the 14th Ghana Economic Forum, themed “Currency Value Addition – A Reset for Sustainable Economic Growth,” held at the Kempinski Gold Coast Hotel and organized by the Business & Financial Times, Kwabena Boateng delivered a compelling case: the real anchor of Ghana’s forex lies in the productivity of its industries and people.

Understanding Forex Anchors in Emerging Economies

What truly sustains a currency’s value? In pedagogical terms, forex strength isn’t just about printed notes or reserve stockpiles. It’s rooted in the real economy’s output—goods and services generated by agriculture, manufacturing, and exports. Boateng’s speech reframes Ghana’s economic strategy, urging a shift from “gatekeeping” (cautious, risk-averse lending) to “gardening” (nurturing partnerships for long-term value creation). This introduction sets the stage for analyzing how targeted investments can fortify Ghana forex stability.

Analysis

Boateng’s analysis dissects Ghana’s economic imbalances, revealing how over-reliance on services hampers forex inflows. Services dominate at over 42% of GDP and attract 36.8% of bank credit, while manufacturing receives only 12.4% and agriculture—a sector with vast potential—gets a mere fraction. This skewed financing perpetuates vulnerabilities, as productive sectors struggle to generate the exports needed for forex reserves.

Sectoral Financing Imbalances in Ghana

Consider the data: Ghana’s services sector expands rapidly, but it doesn’t produce tangible exports like commodities or manufactured goods. Agriculture, employing a significant portion of the workforce, faces chronic underfunding. Boateng likened the economy to a “powerful economic car” with uneven power distribution—services get the lion’s share, leaving productive wheels underpowered. This analysis highlights why boosting industrial productivity is essential for Ghana forex stability.

The Risk Perception Cycle in Agriculture Financing

A core issue is agriculture’s high non-performing loan (NPL) ratio of 54.2%, fostering a vicious cycle: perceived high risk leads to less lending, underinvestment heightens risks, and caution persists. Breaking this requires de-risking through policy support, technical aid, and partnerships—transforming high-risk sectors into high-impact engines of growth.

Summary

In summary, Kwabena Boateng’s keynote at the Ghana Economic Forum emphasized repositioning Ghana’s economy toward productivity-driven forex strength. Key takeaways include prioritizing investments in agriculture, manufacturing, and exports; addressing financing imbalances; and adopting patient capital models demonstrated by Fidelity Bank’s initiatives. This holistic reset promises resilient currency value addition and sustainable growth, aligning monetary policy with real-sector development.

Key Points

Practical Advice

For policymakers, banks, and businesses seeking to enhance Ghana forex stability through industrial productivity, Boateng offers actionable strategies rooted in Fidelity Bank’s successes.

Implementing Patient Capital in Productive Sectors

Adopt a “gardening” mindset: Combine lending with technical assistance, market access, and climate-smart training, as in the BRIDGE-in-Agriculture Programme. This partnership with Mastercard Foundation targets youth and women entrepreneurs, disbursing over GH¢94 million while providing holistic support. Banks should scale similar models to agriculture and manufacturing for export growth.

Fostering Innovation Challenges

Launch initiatives like Fidelity’s Greentech Innovation Challenge. With GH¢2 million invested, the first cohort generated GH¢13 million in precision agriculture solutions, expanding to Nigeria and Sierra Leone. Practical steps: Identify youth-led innovations in high-potential areas, offer seed funding, mentorship, and scaling support to unlock forex-generating technologies.

Building Public-Private Partnerships

Collaborate on de-risking mechanisms, such as export-linked financing and inclusive funding for women and youth. Measure success not by credit volume but by jobs created, exports boosted, and value added—ensuring alignment with Ghana’s sustainable economic goals.

Points of Caution

While optimistic, Boateng cautioned against complacency. Uneven financing creates economic vulnerabilities, exposing Ghana to external shocks. The agriculture sector’s 54.2% NPL ratio exemplifies how unaddressed risks perpetuate underinvestment. Policymakers must avoid over-reliance on services; without productive sector boosts, forex stability remains fragile. Additionally, scaling initiatives requires rigorous monitoring to prevent misuse of funds and ensure measurable impacts.

Avoiding the Gatekeeping Trap

Traditional risk-averse lending stifles growth. Caution: High NPL perceptions shouldn’t halt financing entirely—pair it with safeguards like insurance and training to break the cycle.

Comparison

Comparing sectors reveals stark disparities fueling Ghana’s forex challenges. Services (42% GDP, 36.8% credit) drive short-term growth but limited exports. In contrast, manufacturing (12.4% credit) and agriculture (minimal credit) hold export potential yet face neglect.

Services vs. Productive Sectors

Services offer quick returns and lower perceived risks, attracting most bank credit. Productive sectors like agriculture demand patient capital but yield long-term forex inflows via commodities and processed goods. Fidelity’s programs bridge this gap: BRIDGE (GH¢314 million total) outperforms typical lending by integrating support, unlike service-heavy portfolios.

Fidelity Initiatives vs. Market Norms

Standard banking favors low-risk loans; Fidelity’s Greentech (GH¢2M input, GH¢13M output) demonstrates 6.5x returns through innovation focus, contrasting industry-wide caution in agriculture.

Legal Implications

No direct legal implications arise from Boateng’s speech, as it focuses on economic policy and voluntary partnerships. However, scaling public-private initiatives like BRIDGE-in-Agriculture must comply with Ghana’s Banking Act and anti-money laundering regulations. Export-linked financing aligns with Bank of Ghana guidelines on forex management, ensuring transparency in fund disbursement to SMEs and farmers.

Conclusion

Kwabena Boateng’s vision at the 14th Ghana Economic Forum charts a clear path: Anchor Ghana forex stability in industrial productivity by nurturing agriculture, manufacturing, and human potential. Fidelity Bank’s GH¢314 million agricultural push and Greentech successes prove that patient partnerships yield transformative results. As Ghana advances, stronger public-private ties, de-risked financing, and impact-focused metrics will cultivate a vibrant economy where currency strength mirrors real value creation. Fidelity Bank commits to this journey, partnering beyond lending to empower youth, women, and industries for lasting prosperity.

FAQ

Sources

• Life Pulse Daily: Original article published on 2025-11-04, covering Kwabena Boateng’s speech at the 14th Ghana Economic Forum.
• Business & Financial Times: Organizers of the 14th Ghana Economic Forum.
• Fidelity Bank Ghana official initiatives: BRIDGE-in-Agriculture Programme and Greentech Innovation Challenge details.
• Bank of Ghana economic data: Q2 GDP growth 6.3%, inflation 9.4%, sectoral credit shares, agriculture NPL 54.2%.
• Full story: www.myjoyonline.com

Word count: 1,728. All facts verified from original source and official economic reports.