alibomics

Today, October 21, 2018, I wrote on my Facebook wall about the trouble many Ghanaian savers have gone through between August 2017 and October 2018. Some members of my year group from Opoku Ware School also asked the question in the title on our WhatsApp page today. The highpoint is that they have struggled to get access to their savings at the time they needed it and some of them may only get part of their savings if they get it at all. A number of financial institutions have failed  and others too may go down. I got people liking the Facebook post and others sending me private messages about whether their savings were safe. I believe many of them have seen similar posts I made earlier and they think I may have some expertise or knowledge about the financial system. I won’t accept the tag of “expert” but I will admit that I have some knowledge on the financial system of Ghana and sub-Sahara Africa. I admit to have some knowledge of the financial system firstly because I have be

In this second part I propose a rough guide to determine where to take your deposits or savings. It won’t make you an expert but it would be a fine starting point. I stated e arlier  that banks lend to businesses who in turn pay interest. The stock exchange is a market where companies sell shares. That market reflects (or it is expected to reflect) what is happening to businesses in general. You have to watch that market as an investor even if you don’t hold any shares (the Composite Index). On a daily bases, the stock exchange reports the performance of the firms listed on the exchange. You should look out for the overall performance of the stock exchange as a signal of what kind of interest you should expect to receive on your deposit. The Ghana stock exchange rarely crosses 30% (per annum). This means that the guys who actually do “real work” don’t even get more than 30% in 12months. So if the bank or savings and loans company or pyramid scheme tells you they can pay you 30% e