Old Mutual Financial Services Monitor Reveals Economic Struggles and Resilience Among Ghanaians

The latest edition of the Old Mutual Financial Services Monitor (OMFSM) has provided an in-depth analysis of the financial attitudes, behaviors, and priorities of working Ghanaians, offering critical insights into the country’s evolving economic landscape.

The study, which focuses on urban and peri-urban Ghanaians aged 25 to 59 earning at least GH₵1,000, highlights how citizens are adapting to economic challenges. While financial stress remains high, there is an increasing reliance on social support networks, reflecting the strong cultural value of “biako ye”—a belief that individual well-being is tied to the community.

The survey found that while only 22% of respondents express confidence in the current state of Ghana’s economy, optimism for future improvement is rising, with 61% believing the economy will improve within the next 12 months.

However, financial stress levels remain high, with six in ten working Ghanaians experiencing economic hardship. Many cite the high cost of living, stagnant wages, and economic uncertainty as key concerns.

Income security remains the top priority for many Ghanaians, with 69% reporting either stagnant or lower earnings compared to the previous year. Financial obligations such as supporting extended family members have also risen in importance, reflecting the increased pressure on households to provide for multiple dependents.

To cope with financial challenges, more Ghanaians are seeking alternative income sources. The study reports that 21% of working Ghanaians are “PolyJobbers,” engaging in side hustles, freelancing, and additional work beyond their primary jobs.

Additionally, reliance on informal financial support systems has grown, with 42% borrowing from family and friends, and 20% turning to Susus for financial assistance.

Ghanaians are increasingly prioritizing savings despite financial difficulties. The report shows a decline in the use of savings to cover shortfalls, with more individuals seeking structured investment options. Preferred savings methods include business investments (56%), banking (53%), mobile money (32%), and property investment (30%). While informal savings remain common, formal savings through banks have risen to 57%, indicating a growing shift toward financial security.

With increasing financial strain, borrowing has become more common. The study found that loans from financial institutions have increased to 13%, while mobile money loans have surged from 12% to 22% in the past year. Many borrowers use these funds for business investments, unexpected expenses, and education costs.

However, debt repayment remains a lower priority, with only 6% of household income allocated to servicing loans.

Despite widespread recognition of the importance of retirement savings, it remains a low priority. Only 33% of respondents actively save for retirement, with confidence in their retirement preparedness dropping from 18% to 9% compared to last year. The lack of financial planning and limited access to professional financial advice remain key barriers to long-term savings.

Entrepreneurship continues to be a major driver of economic activity in Ghana, with nearly half (49%) of working individuals owning or co-owning a business. However, access to formal financing remains limited, with most entrepreneurs relying on personal savings, business profits, and informal lending networks. Notably, 88% of entrepreneurs do not have business insurance, with many citing lack of formal registration as a barrier.

The report highlights the need for greater financial education and advisory services, as 90% of Ghanaians do not have a financial advisor and half do not know where to turn for financial guidance. Financial institutions and employers have an opportunity to bridge this gap by providing tailored financial solutions and accessible education programs.

The 2024 Old Mutual Financial Services Monitor paints a picture of resilience among Ghanaians despite economic difficulties. While financial stress remains high, the commitment to savings, investment, and entrepreneurship is evident. With the right financial support and education, Ghanaians can build stronger financial futures, balancing immediate economic needs with long-term stability.

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