Ghana registered its first two Covid-19 cases on March 12, 2020. On March 16, the Bank of Ghana (BoG) directed financial institutions in the country to “ensure that banking halls, automated teller machines (ATMs), counting machines and other relevant equipment are sanitized on a regular basis” and “ensure all electronic channels are fully functional at all times and ATMs do not run out of cash.”
BoG data shows that currency in circulation grew from 13.64 billion Ghanaian cedis (GHS, equivalent to USD2.26 billion) in March 2020 to GHS19.32 billion (USD3.2 billion) in March 2021, an impressive 41.6% yearly increase (see Graph 1).
Graph 1. Ghana: Currency in Circulation, January 2020-March 2021
DIGITALISATION AND ITS CHALLENGES
In 2017, the country adopted a “Digital Ghana Agenda” to promote inclusion through digitalisation. Before the Covid-19 pandemic, the strategy had helped improve Ghanaian’s access to mobile phones and the internet, slightly less so for bank accounts (see Graph 2). Geta Striggner-Quartey, Vodafone Ghana’s Legal and External Affairs Director, has called the government to expand the initiative by collaborating with “smartphone manufacturers and operators, as to make more smartphones reach nearly every adult.”
Graph 2. Ghana: Access to Mobile Phones, Internet, and Bank Accounts, 2017-2019
Ebow Anamoah-Mensah, chief technology officer of IT Consortium, has recognized the role of the government as a prime mover towards digital payments in the country. “Now that the government has joined the cashless society, there will be […] fewer situations that one may need cash. I am sure in the next 20 years, cash will be scarce in a lot of countries including Ghana.”
The digital agenda has left structural shortages in the cash and financial infrastructure unaddressed. According to the World Bank, Ghana had only 11.51 automated teller machines per 100,000 adults in 2018, and less than 60% of adults had access to financial services.
DIGITALISING GHANAIAN PAYMENTS
In May 2007, the BoG incorporated a subsidiary, Ghana Interbank Payment and Settlement Systems, Ltd. (GhIPSS), to implement and manage interoperable payment infrastructures for banks and non-banks. Through GhIPSS, the BOG has consolidated ATM networks and advanced mobile money interoperability, instant pay platforms, and universal QR code services.
In 2020, GhIPSS processed 77 million transactions across its platforms, a 103% yearly increase compared to 33 million transactions in 2019 (GhiPSS Annual Media Engagement 2021). By value, however, GhIPSS transactions went from GHC219 billion (USD36.35 billion) to GHC254 billion (USD42.16 billion) in the same period, a much more modest 16% increase. This growth rate is lower than the 29.7% increase in Ghana’s currency in circulation between May 2019 and May 2020.