Bank loans alone cannot drive expansion; firms must tap capital markets — Absa

The Head of Trading, Global Markets at Absa Bank Ghana Limited, Andrews Akoto, has encouraged Ghanaian businesses, particularly manufacturers and industrial firms, to increasingly utilise the country's capital market to secure long-term financing for expansion instead of relying solely on traditional bank loans.

According to him, businesses seeking to establish factories, expand production capacity or undertake major investment projects require patient capital that commercial banks are often unable to provide due to the short-term nature of most lending facilities.

Mr. Akoto made the remarks during Channel One TV's Quarterly Economic Review, where industry experts assessed the performance of Ghana's economy during the first half of 2026 and discussed strategies to sustain economic recovery.

Speaking during the programme, Mr. Akoto explained that while commercial banks play an important role in financing business operations, they are generally not structured to provide the long-term funding needed for major capital-intensive investments.

He said manufacturing companies planning to build factories or significantly expand their operations should consider raising funds through Ghana's capital market.

"The kind of capital that these businesses need is long-term capital, and traditional bank loans are not fit for purpose for that kind of expansion."

According to him, access to long-term financing enables businesses to invest in productive assets while maintaining healthier cash flows and reducing repayment pressure.

Mr. Akoto described Ghana's capital market as an important financing platform capable of supporting business growth through the issuance of corporate bonds and other long-term investment instruments.

He said companies that access the capital market can obtain patient capital from institutional and individual investors, allowing them to finance expansion projects without relying entirely on conventional bank credit.

The capital market, he noted, plays a vital role in supporting industrialisation, infrastructure development and private sector growth.

Highlighting the resilience of Ghana's financial markets, Mr. Akoto pointed out that several companies successfully raised funds through the debt capital market even during the country's economic challenges and debt restructuring programme.

He explained that despite difficult market conditions in 2022 and 2023, investor confidence remained strong enough to support well-structured businesses seeking financing.

"During the heat of the crisis in 2022 and the restructuring in 2023, you would think that investor capital would not invest. But there were businesses in Ghana that were able to raise capital in the debt capital market through bonds at cheaper rates than the government levels."

According to him, the experience demonstrates that businesses with sound financial fundamentals can continue to attract investment regardless of broader economic conditions.

Mr. Akoto stressed that companies seeking financing through the capital market must strengthen their internal governance systems and embrace higher standards of transparency and accountability.

He explained that accessing funds from public investors requires businesses to disclose more information about their operations, financial performance and governance practices.

"The other side of that is really structuring your business well, corporate governance, being ready to expose that business to public scrutiny because you are accessing capital from the public markets."

He noted that strong corporate governance not only enhances investor confidence but also improves a company's long-term sustainability and competitiveness.

Mr. Akoto's remarks come as Ghana continues efforts to accelerate private sector growth, industrialisation and economic transformation through increased investment and improved access to finance.

Financial analysts have consistently argued that expanding the use of Ghana's capital market could reduce businesses' dependence on short-term borrowing while providing the long-term funding needed to drive manufacturing, infrastructure development and job creation.

As economic conditions continue to improve, market experts believe greater participation in the capital market could unlock new opportunities for Ghanaian businesses seeking sustainable growth and expansion.