Ghana’s investors open-up to complement UN efforts in Ghana

Investment financing provides the capital needed for infrastructure, industry, and technology development, which are essential drivers of productivity, job creation, and long-term economic growth. Access to finance helps businesses, especially MSMEs, expand, innovate, and create jobs. Unfortunately, many developing countries such as Ghana face significant gaps between available public resources and the scale of investment required to meet development goals.

The current level of investment funding available in Ghana suggests a funding gap of US $6 billion a year. In addition, foreign direct investments declined from 3.3% of the GDP in 2021 to 2% of the GDP in 2022. This means Ghana will need more than US $11 billion annually over the next 15 years to achieve the Sustainable Development Goals (SDGs).

Access to finance is therefore a major challenge for entrepreneurs: the MSME financing gap in Ghana is estimated at 13 percent of the GDP (about US$6.1 billion in 2017). Impact investing, as a strategy for generating both financial returns and measurable social or environmental impact, has gained considerable momentum over the past decade as an alternative to traditional banking for MSME finance.

However, while the potential for impact investing remains vast, many argue that the pipeline creation remains a challenge in emerging countries with high risk profile like Ghana. To tackle this, the UN Joint Programming in Ghana on Leveraging Digital Ecosystems for increased MSMEs’ Productivity (Digital JP), funded by the UN Joint SDG Fund brought together key actors of the investor landscape to strengthen alliances and agree on a roadmap for a win-win scenario that will inure to the benefit of the MSME ecosystem.

The meeting brought together over 30 participants from the private sector, UN system and regulatory bodies. The discussion centred on two key aspects; how the UN system can help de-risk private sector operations to finally crowd-in capital, and how the private sector can leverage UN efforts to help countries achieve the SDGs. 

Headed by the UN Capital Development Fund (UNCDF), which has the unique mandate to deploy financing instruments that support such initiatives, the meeting evolved around the following key development challenges: 1) Providing catalytic capital to de-risk investments: how can the joint programme help de-risk investments in underserved markets? By using a market system approach which tackles the MSME ecosystem at macro, meso and micro level, this can reduce the risk for private investors, making impact investments more attractive; and 2) Supporting early-stage ventures and entrepreneurs: such programmes could help create the pipeline that investors need, filling the missing middle that struggles the most in graduating towards private sector investment.

The Director of the Securities and Exchange Commission (SEC), Dr. James Klutse Avedzi reaffirmed Ghana’s commitment to establishing a resilient regulatory framework that enables investors to confidently pursue their investment goals while safeguarding the integrity of the market. He highlighted the importance of strategic partnerships with institutions like UNCDF, recognizing that such collaborations are essential for creating pathways that align regulatory oversight with sustainable development objectives.

Investors at the event highlighted the scarcity of robust, investment-ready project pipelines that meet both financial viability and impact criteria as a fundamental challenge facing the development finance sector.

The digital joint programme of the Joint SDG Fund, led by UN Resident Coordinator’s Office and implemented by UNCDF, UNDP and UNCTAD, is funded by the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, The Netherlands, Norway, Poland, Portugal, Republic of Korea, Saudi Arabia, Spain, Sweden, Switzerland and our private sector funding partners, for a transformative movement towards achieving the SDGs by 2030. 

The digital joint programme is not just about providing financial resources; it’s about creating systems that make it easier for the private sector to invest in underserved markets. By leveraging the UN system and the core expertise of UNCDF, UNDP and UNCTAD as implementing participating UN agencies, the joint programme can complement efforts to crowd-in capital by facilitating partnerships between governments, private investors, and MSMEs.