Financialisation and Poverty Alleviation in Ghana

Francis B. Frimpong is a Lecturer of Economics and Strategic Business Analytics at the University of East London (UEL). He is also Assistant to the Directors of the Centre for the Study of States, Markets and People (STAMP) at UEL. A recent (co-authored) publication is The Pandemic and the Economy of Africa: Conflicting Strategies between Tanzania and Ghana (2020).

"Financial inclusion policy as a way of empowering the poor makes poverty a financial problem in Ghana – the financialisation of poverty. Francis Boateng Frimpong tackles this question with theoretical sophistication and vivid empirical detail. This is an original addition to our understanding of how-and-why neoliberal restructuring and its financialisation dimension work in a low middle-income country, the first country in Sub-Saharan Africa to achieve the Millennium Development Goal 1, which is the target of halving extreme poverty. Frimpong has authoritatively produced this important political economy contribution about the impact of the exponential growth of finance on poverty alleviation in Ghana. Highly recommended." —Bülent Gökay, Professor of International Relations, Keele University"This book provides original theoretically sophisticated, historically sensitive and empirically grounded analysis. The political economy history of Ghana is narrated in a way that makes the reader understand what the country went through, and where it is headed. The author has done justice in his narration." —Abraham Adu, University of Aberdeen"The book offers a comprehensive assessment of the nature and distinctive features of financialisation in the periphery, with a focus on Ghana. This book provides academics, professionals and policy makers with the understanding of policy response towards the alleviation of the overarching poverty in Ghana. Crucially, espousing an indispensable hypothetical approach to financialisation, the uniqueness of Ghana and its common features with the core. It is a must-read for supporters of both Keynesian and Marxism."—Emmanuel Affum-Osei, Kwame Nkrumah University of Science and Technology"All aspects of this book are fascinating to read. However, the one that fascinated me the most was the in-depth analysis on baking the unbanked, specifically the use of mobile money and how it still benefits the capitalists despite promises of relieving the poor. Frimpong’s analyses throughout are a very interesting read for researchers, students, and even Marx and Keynes enthusiasts. It is a must read." —Leah Mwainyekule, University of Hull"A book on this historically specific geographical setting contributes theoretically to studies on financialisation in general, helping to determine its prominent features better. It is a good source of information for researchers who want to explore the history of the political economy of Sub-Saharan Africa, and in particular, Ghana." —Mato Magobe, The Open University of Tanzania

• ForewordAcknowledgementsList of Figures and TablesAbbreviationsAbout Financialisation and Poverty Alleviation in Ghana1  Introduction1 The Historical Background of Finance and Growth2 Scope and Limitations of the Book3 Structure of the Book2  Neoliberalisation and Financialisation The Debate1 Introduction2 The Rise of Neoliberal Capitalism3 Theoretical Debates and Historical Precedents of Financialisation4 From Stagnation to Financialisation5 French Regulation School Theory of Financialisation6 Post-Keynesianism and Financialisation 7 Trans-nationalisation and Liberalisation of Finance8 Financialisation and Poverty Alleviation: Banking the Unbanked9 Conclusion3  Finance-Growth-Nexus Theoretical and Empirical Literature1 Introduction2 The Rise of Finance and the Financialisation of Everything3 The Financial Profit Conundrum – Profit in Marxist Economics4 Real Commodity Accumulation and Fictitious Accumulation5 Contemporary Heterodox Perspectives on Finance-led Growth Debate5.1  Banks, Financial Markets and Economic Growth: The Dilemma6 Economic Functions of Financial Intermediaries6.1  Empirical Evidence on Finance and Growth6.2  Cross-country Studies of the Finance-Growth Nexus6.3  Contemporary Literature on Econometric Models for Ghana7 Dynamics of Financial Development, Income Distribution, Economic Growth and Poverty Reduction in Ghana8 Poverty and the Pandemic: The Case of Ghana8.1  The Economics of It All9 Conclusion4  The Case of Ghana1 Introduction2 Country Profile and Overview of Recent Economic Performance3 The Political Economy of Ghana: From State-led Accumulation to Neoliberalism3.1  Political and Economic Developments from Independence (1957) to 19823.2  Political and EconomicDevelopments 1983–20194 Neoliberalism in Ghana4.1  Neoliberalism and Housing Provision in Ghana5 Financial Sector Reforms in Ghana – A Historical Perspective5.1  Pre-structural Adjustment Financial Reforms 1957–19825.2  Post-liberalised Reforms5.3  Relaxation of Bank Entry Restrictions, and Abolishment of Secondary Reserve Requirements 2005–20065.4  Recapitalising Banks6 Financialisation in Sub-Saharan Africa: Accounting for the Ghanaian Paradox6.1  Under-financed6.2  … Yet Financialising6.3  Reverse of Net Capital Flows – A Subordinate/Inferior Financialisation7 Conclusion5  Dimensions of Capital Structure and Liquidity Management in Ghana1 Introduction2 Theories of Capital Structure2.1  Capital Structure: Traditionalists’ View2.2  Value-irrelevance Theory by Modigliani-Miller2.3  Capital Structure: Trade-off Theory2.4  Capital Structure: Pecking-order Theory3 Financialisation and Capital Structure Accumulation in Ghana4 Classification of Capital Accumulation Process in Ghana5 Contradictions in Political-Economic Arrangements in Ghana5.1  Financing Challenges5.2  Government Policies5.2.1 Corruption5.2.2 State of Infrastructural Development6 Conclusion6  The Issue of Poverty1 Introduction2 Poverty Measurement Conundrum3 Absolute Poverty3.1  Poverty in Administrative Regions4 Relative Poverty4.1  Using Non-monetary Deprivation5 The Paradox of Sub-Saharan Africa’s Middle Class5.1  The Two Competing Narratives on Africa6 Neoliberal Globalisation and Poverty7 Conclusion7  Financialisation and Households From Theory to the Context of Ghana1 Introduction2 Theory of Consumption Function: Household Debt and the Life Cycle and Permanent Income Hypotheses3 The Political Economy of Household Finance4 Payment Systems in Ghana: A Route towards Financialisation4.1  Background-Mobile Money Services in Ghana4.2  The Role of Mobile Money in Financial Inclusion in Ghana5 Financialisation, Financial Inclusion and Mobile Money6 Conclusion8  Conclusion1 Summing Up the Argument2 The Content of Financialisation in Ghana2.1  Banking Sector2.2  Industrial Enterprises2.3  Households3 Policy RecommendationsReferencesIndex