Business
You have somebody coming from outside to do business here. He’s from Switzerland. He is taking a loan there for 3%, while you are taking a loan for 40% here. How do you work with that person?
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The founder of A&C Mall, Dr. Andrew Asamoah has disclosed that one of the biggest obstacles facing Ghanaian entrepreneurs is the high cost of borrowing, arguing that it puts local businesses at a significant disadvantage against foreign investors.
Speaking on Kafui Dey’s podcast, Dr. Asamoah painted a stark picture of the financing gap.
“You have somebody coming from outside to do business here. He’s from Switzerland. He is taking a loan there for 3%, while you are taking a loan for 40% here. How do you work with that person?”
According to him, the difference in borrowing costs is one reason foreign-owned businesses often outperform local companies.
“That’s why foreigners are doing better because they take loans from outside—cheaper interest rates and longer repayment periods”, he said.
Although lending rates in Ghana have eased, Dr. Asamoah noted they remain prohibitively high for many entrepreneurs.
“Even now, you can’t get a loan at less than about 25%. It’s still very high.”
His own experience was different. To develop A&C Mall, Ghana’s first shopping mall, he secured financing from the International Finance Corporation (IFC), the private sector arm of the World Bank Group.
While the loan was denominated in US dollars, he described its terms as favourable. “It’s good. Very good. I’m very satisfied with it.” Dr. Asamoah said affordable long-term financing is essential for ambitious projects such as shopping malls, factories and other major developments.
He explained that short-term borrowing can work for businesses importing goods that are sold quickly, allowing loans to be repaid within weeks. But long-term investments are a different challenge.
“When you want to do something that will germinate in 10 years or 15 years, it’s not easy.” Reflecting on the growth of Ghana’s retail sector, Dr. Asamoah expressed disappointment that more locally owned malls have not emerged since A&C Mall pioneered the concept.
He noted that while several shopping malls now operate across the country, many are foreign-owned.
“The only mall which is fully Ghana-owned is A&C Mall. Now I see the China Mall and this mall… Where is the Ghanaian-owned one? It pains me.”
He believes Ghanaian entrepreneurs should have been better supported to build on the foundation A&C Mall established.
“Once we set the pace, we should have been the leaders. More effort should have been made to help other Ghanaians come into the market.”
For Dr. Asamoah, the challenge is not a lack of ambition or ideas, but the cost of capital. Until local businesses can access affordable, long-term financing, he believes many will continue to struggle to compete on equal terms with international investors.
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