Ghana has entered a new political era with the election of former President John Dramani Mahama, who reclaimed the presidency after defeating Vice President Mahamudu Bawumia. This leadership shift, after two terms under the New Patriotic Party (NPP), comes amid one of the country’s worst economic crises in recent memory, characterized by soaring inflation and a historic debt default.
Mahama’s victory on the back of a 56.3% majority vote carries not just political implications but significant economic ones, including his ambitious pledge to establish a $50 million fintech growth fund aimed at fostering innovation and financial inclusion. The question now arises: can this bold promise become a reality, and if so, what will it mean for Ghana’s economic landscape?
In March, Mahama outlined his vision to transform Ghana’s nascent fintech sector, describing it as a critical driver for economic growth and financial inclusivity. The proposed $50 million growth fund would support startups in the industry, addressing challenges such as limited access to capital and regulatory bottlenecks.
“We did it for the pharmaceutical industry, and we can do it for fintech,” Mahama remarked, referencing a previous $10 million initiative under his administration that enabled local pharmaceutical companies to expand and export products regionally.
His plan also includes streamlining regulatory frameworks to encourage competition and innovation while establishing a dedicated body to ensure transparency and equity in fund disbursement.
Ghana’s fintech sector has witnessed rapid innovation in recent years, disrupting traditional banking systems and extending financial services to underserved communities. However, access to capital remains a significant barrier for startups.
Martin Kwame Awagah, President of the Ghana Fintech and Payment Association, views the proposed fund as a critical enabler for the industry. “The establishment of a growth fund will undoubtedly fuel innovation and drive the sector forward,” he said, emphasizing that fintech presents an opportunity to leapfrog traditional banking infrastructure and expand financial inclusion.
Despite its promise, Ghana’s fintech ecosystem remains underfunded. Last year, startups in the country raised just $75 million in equity investment, significantly trailing Nigeria’s $469 million.
Where Would the Financing Come From?
While the $50 million fund offers hope, questions remain about its financing. Ghana’s economic challenges and limited fiscal space could hinder the realization of such a fund. The government’s Venture Capital Trust Fund (VCTF), established to support small- and medium-sized enterprises (SMEs), provides a cautionary tale.
Although the VCTF received a $40 million injection under the Ghana Economic Transformation Project, it still falls far short of the estimated $15 billion needed to meet SME financing demands. Moreover, the preference of foreign investors to domicile funds offshore further complicates the landscape, reducing local access to vital capital.
Percival Ofori Ampomah, VCTF’s General Manager, highlighted this issue, noting that over 90% of VCTF funding comes from foreign sources, a dependency that undermines efforts to build a self-sustaining venture capital ecosystem.
Mahama’s fintech agenda also aims to address systemic issues, such as gender disparity in financial inclusion. According to the World Bank’s FINDEX report, the gender gap in financial access widened from 3% in 2014 to 11% in 2021.
“It is unacceptable that women, who constitute 51% of our population, face increasing financial exclusion,” Mahama stated, committing to policies that promote gender equity in fintech participation.
Additionally, his administration plans to revamp regulations to foster a more competitive and diverse fintech ecosystem, ensuring licensing processes are transparent and merit-based.
Can Mahama Deliver?
While the proposed fintech growth fund has generated optimism, its success will depend on the government’s ability to secure sustainable financing, build institutional capacity, and maintain political will.
Economic observers caution that Ghana’s current debt crisis could impede large-scale public investments. However, innovative financing mechanisms, such as public-private partnerships, could help bridge the gap.
For Ghana’s fintech sector, the stakes are high. A well-implemented growth fund could catalyze innovation, attract investment, and create jobs, positioning the country as a regional leader in digital finance. On the other hand, failure to deliver on this promise could deepen disillusionment in an already strained economic environment.
As Mahama assumes office, the country’s tech startup community — and the nation at large — will be watching closely to see whether his $50 million vision transforms from campaign promise to reality. For Ghana, it could be a defining moment in its journey toward economic resilience and digital innovation.