By Joshua Worlasi AMLANU
Ghana's efforts to move towards an economy with less reliance on physical cash are encountering a lower than anticipated adoption rate of digital payment methods among businesses, as revealed by the latest comprehensive research conducted across the country by the Ghana Statistical Service (GSS) and the ReFinD initiative.
The document, included within the 2024 Integrated Business Establishment Survey (IBES), indicates that merely 37% of businesses nationwide have adopted or utilize digital payment systems. The adoption rate is notably minimal in the agriculture industry, with companies in this field being the least inclined towards these services.
Although these figures highlight the significant potential of digital finance for fostering business expansion and increasing financial access, usage is still largely centered in Greater Accra and some major urban centers across regions. Information deficits, concerns about fraud, and doubts regarding profitability persist as barriers to wider acceptance, particularly amongst small businesses.
Professor Peter Quartey, who serves as the Director of the Institute for Statistical Social and Economic Research (ISSER), noted at the release of the report that although advancements have occurred, digital payment methods continue to be underused within the business community.
Even though cash remains dominant, we have made some progress," he observed. "However, issues such as taxes — notably the e-levy — along with security worries persist and hinder wider acceptance.
The research indicates that many businesses utilizing digital platforms predominantly use individual mobile payment accounts, which are often more expensive and inefficient for commercial activities. In contrast, bigger corporations usually adopt a variety of options, employing merchant accounts better suited to their operational requirements and contributing to increased earnings.
Even though female managers have shown impressive capabilities in increasing revenue and embracing merchant accounts, enterprises owned by women frequently face challenges due to restricted access to capital — a major obstacle to broader acceptance.
Women managers generally excel at running companies," stated Professor Quartey. "However, the challenge lies in the fact that many females do not have sufficient funds to start or grow enterprises, which restricts their capacity to engage with digital financing.
Francis Annan, who works as an associate professor of economics at the University of California, Berkeley and also leads the ReFinD initiative alongside others, characterized these findings as "remarkable." According to his observations, although around 95 percent of those questioned indicated they had utilized digital transactions for personal use, merely approximately 37 percent of companies stated they engaged in similar practices.
This significant disparity provides insight into various selection challenges within the marketplace," stated Mr. Annan. "Companies encounter obstacles such as insufficient knowledge and worries regarding security. These hurdles do not affect well-educated consumers significantly. However, throughout the wider business environment, these limitations are indeed present and impactful.
He thinks that tackling these obstacles will not just increase financial accessibility but also boost company-level efficiency and, consequently, enhance the overall national economy.
"When companies expand, they employ additional staff, increase production, and contribute positively to the overall economy," he stated. "Given our starting point with a modest foundation, our efforts can generate significant returns," he further explained.
The report suggests enhancing uptake through several strategic approaches: bolstering cybersecurity within digital finance platforms; encouraging enterprises led by women; extending digital infrastructure coverage outside of large urban centers; and reinforcing knowledge related to both digital tools and financial management among business proprietors, directors, and employees.
The report similarly promotes collaborative alliances among academic researchers and various stakeholders in the ecosystem—including fintech companies, mobile money providers, banking institutions, regulatory bodies, and policymakers—to jointly create pragmatic, data-backed solutions.
Kenneth Ashigbey, CEO of the Ghana Chamber of Telecommunications, highlighted the significance of utilizing these insights to create more inclusive financial services. "It has been evident for some time that we must shift our focus from person-to-person transactions to those involving merchants," he stated. "The gender disparity is undeniable, and with this new data, we can better understand how to tackle it."
Mr. Ashigbey similarly raised concerns about using the term 'informal' when discussing unregistered enterprises, arguing that these designations might hinder initiatives aimed at encouraging their official registration and incorporation into digital systems. He emphasized the importance of redirecting attention towards educating and engaging with communities, pointing out that smartphone usage rates in places like Wa exceed the country’s overall averages thanks to localized educational campaigns.
This indicates that we must increase our efforts at the community level," Mr. Ashigbey stated. "In collaboration with the Bank of Ghana and the Ministry of Finance, we plan to utilize this data to enhance the precision of our educational initiatives.
In conclusion, the report highlights that although digital finance offers significant opportunities for Ghana’s commercial environment, achieving its complete benefits will necessitate consistent and collaborative efforts from both governmental and corporate entities, ensuring inclusivity throughout.
Provided by Syndigate Media Inc. ( Syndigate.info ).
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