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Financial Literacy Education Campaign to Ignite Responsiveness of Consumers Held

Financial Literacy Education Campaign to Ignite Responsiveness of Consumers Held

Accra, 16thAugust, 2023 - The Ministry of Finance, has on behalf of the Government of Ghana, embarked on a nationwide financial education campaign to enhance consumers’ awareness and address irregularities that tend to weaken the financial sector.

A detailed assessment of the financial education landscape across the 16 regions of Ghana was undertaken to collect data on target audience, their level of financial literacy and knowledge gap as well as their preferred delivery platform.

The findings from the survey informed the development of a five-year National Financial Literacy Strategy (2021-2025) to serve as a blueprint for bolstering the financial capacity of the public.

The financial literacy programme was conducted together with industry regulators and associations in the financial space including the Bank of Ghana, Securities and Exchange Commission, Ghana Stock Exchange, National Insurance Commission, National Pensions Regulatory Authority, Ghana Deposit Protection Corporation, Ghana Microfinance Institutions Network, Ghana Association of Savings and Loans Companies, Micro Credit Association of Ghana, and Co-operative Credit Unions Association.

The latest stakeholder engagement was held at the Ghana National Association of Teachers Hall, Accra for Professional Organizations and Associations.

Delivering the keynote address on behalf of the Minister of State at the Ministry of Finance, Hon. Dr. Mohammed Amin Adam, the Director of Financial Services Division at the Ministry of Finance, Mr. Sampson Akligoh noted that, the campaign was intended to ignite responsiveness of consumers to make decision with understanding.

“The primary goal of the campaign is to equip consumers of financial services with the capacity to act in their own best financial interests, given their unique socioeconomic and environmental conditions. It also seeks to empower these consumers with the requisite knowledge (literacy), attitudes, skills and behavior to manage their resources, and to assist them understand, select and use financial services that fit their needs. This is a key pillar in the Financial Inclusion agenda of the Government” the Minister of State noted.

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.

The government, he underscored, developed the National Financial Inclusion and Development Strategy (NFIDS) to boost financial inclusion from 58% to 85% by 2023, focusing on stability, services, infrastructure, consumer protection, and capability.

Regardless of the enviable strides made by various stakeholders in the financial literacy agenda of government, records available per a preliminary assessment of Ghana’s financial literacy education landscape conducted by the Ministry of Finance, revealed that, the average financial literacy score in the country as of 2021 was 12 out of a total score of 21.

This indicated that, many Ghanaians lacked basic understanding on key financial issues such as the impact of inflation on the value of their money, computation of interest on loans and investments, awareness and use of financial products and services, among others.

This, according to the Minister of State, made it difficult for consumers to make informed financial decision. “…between 19% and 32% (an average of about 28%) of Ghanaians follow trends in the financial sector. This implies that about 72% (on average) of the population do not follow trends in the financial sector and as such, have no idea of developments in the sector. This shows the lack of interest by people in the management of their personal finances. They would prefer to shift their financial responsibilities to others”, he revealed.

“Always bear in mind that risk and returns have a positive relationship, that is the higher the risk the higher the returns and the lower the risk, the lower the investment returns. This cardinal investment principle when breached will threaten the safety and security of your investment,” he cautioned.

In his welcome address, Mr. Andrew Ameckson, Head, Banking and Non-Banking Unit at the Ministry of Finance, noted that, it was imperative for government to ensure the necessary conducive platform was created for citizens to understand and trust in the financial services and products for their benefits.

According to him, between 2015 and 2016, Ghana’s financial sector was in substantial state of turmoil as many financial institutions were insolvent, undercapitalized and had no license to operate in the country.

“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 financial sector with possible spillover consequences for the rest of the economy” he added.

Mr. Ameckson revealed that, the Ministry of Finance with funding from the World Bank had embarked on the Ghana Financial Sector Development Project (GFSDP) with the aim of promoting financial sector soundness and access to financial services by individuals. 

Participants at the meeting were taken through power point presentations on investments, savings, stocks, pensions, insurance, bonds among others by the various financial institutions supporting the sensitization. END