Businesses must reduce their reliance on banks for funding and consider other sources of finance to support their operations, Paul Ababio, Deputy Director-General in Charge of Finance at the Securities and Exchange Commission, has observed.

Speaking to Business24 in an interview, he said there are other avenues whereby especially small and medium enterprises can raise long-term capital for their business operations and expansion.

“If you look at our financial market, businesses have been heavily reliant on the banking sector. One may say that our venture capital space is nascent, but that is also a source of long-term funding for small businesses.”

He added that the government is currently reforming the Venture Capital Trust Fund to strengthen its operations and enable it support more businesses and the growth of the capital market.

Commenting on Ghana’s investment outlook, Mr. Ababio said “Ghana has a stable democracy, and our economy is strong and robust. Some economies shrank during COVID–19, but Ghana continues to grow.”

He added, though: “We have a very high cost of borrowing, and a big part of it comes from the communication of how our market operates and of our expectations as well. Sometimes we have very high expectations, but the reality is that business itself has natural challenges and we have to appreciate that and ensure that the communication is done to create the avenues for appropriate investments.”