Decentralized Finance (DeFi): the future of Ghana’s economy

The first two decades of the 21st century have known continuous and considerable advancements of technology in diverse fields. Recently, as far as the domain of finance is concerned, the technologies have developed a system which makes finance open to anyone for use, rather than going through third parties like banks or forex.

The network developed, permitting such transactions are called Decentralised Finance, also known as DeFi. Unlike the traditional finance system which is Centralised; controlled by the government, through the Central Bank System, DeFi which operates on a blockchain, makes it possible for users of the system to interact on a one-to-one basis (P2P) with a software-based interface rather than a physical and moral institution facilitating a transaction.

Cryptocurrencies like bitcoin, Ethereum and Tether USDT amongst others use the Decentralised Finance system for transactions. As such, users of these currencies are able to manage their finances without any fear or inconvenience from a third party. Thus, in this article we will look at Centralised Vs Decentralised finance in Ghana and DeFi as an opportunity to boost Ghana’s economy.

Centralised vs Decentralised finance

The Bank of Ghana and the Ghanaian Ministry of Finance, responsible for finance management in Ghana, operate on a centralised system.

Amongst other responsibilities, both institutions define the monetary policy framework of Ghana, its supervision and regulation as well as the payment systems used for national and international transactions. As recently as May 2020, Ghana became the first country to launch a digital financial services (DFS) policy.

It is noted that over 19 million adults have 14.5 million active Mobile Money accounts in Ghana. As a result, Ghana’s efforts to boost its economy include measures aimed at promoting the use of Digital Financial Services (DFS).

However, the Digital Financial Service which is part of the Central Bank Digital Currency (CBDC) should not be mistaken for platforms offering digital currency services like bitcoin.

Due to the centralised system on which the Bank of Ghana operates, it is difficult to circumvent situations of inflation which often are a consequence of economic regression.

With the advent of Decentralised Finance, both the unbanked and underbanked population can benefit from financial services which permit them to be in total control of their finances. In effect, DeFi positions itself as a path of financial inclusion for Ghanaians from all walks of life.

DeFi as an opportunity for Ghana’s economy

Relief for unbanked population

The state of the Ghanaian financial system is highly centralised with the majority of the population being unbanked. Small and Medium sized business entrepreneurs claim to be excluded from the financial system with regards to their unbanked status.

Entrepreneurs who are banked rely on high-cost financing such as credit facility services offered by the banks. The direct consequence is slow economic growth, given the high interest rates that banks request from loans. In such a situation, Decentralised Finance comes to relieve the frustrations that result from the traditional finance system.

It is worth noting again that Decentralized Finance is a peer to peer system that is not controlled by any centralized institution, like a bank. You deal with your peers through a software interface in a secure environment enabled with blockchain technology.

Solution to limited bank access

As it is the case with most African countries, the majority of the population in Ghana does not have access to formal financial services. The lack of bank accounts reduces the chances for obtaining loans for entrepreneurial projects.

DeFi protocols enable for the first time to borrow or lend money on a large scale between unknown participants and without any intermediaries. Those applications bring lenders and borrowers together and set interest rates automatically in accordance with supply and demand.

Promotion of financial transparency

DeFi also makes financial transactions more transparent. By eliminating third parties like banks, many transactions are completed through a decentralized network. Ethereum is the most commonly used platform today, but other platforms could work too.

Consequently, business owners in Ghana will be able to process rapid transactions at very limited cost, without any waste of time. It is noted that an economy that experiences the fast and fluid movement of money grows exponentially. DeFi is therefore the right opportunity to cease.

Bridge of financial gaps

Ghana’s economy stands to gain a lot and experience a boom if its citizens start making use of DeFi. Let’s for instance, consider an economy in which all adult citizens have the financial resources needed to boost their commercial or entrepreneurial activity on a daily basis.

It is obvious that the implication will be a higher purchasing power of citizens leading to higher standards of living. In other words, DeFi could bridge the wide and long existing gap between the rich and the poor in the Ghanaian economy. Thereby reducing poverty, empowering citizens and promoting entrepreneurship to give way to a more peaceful society.


In summary, DeFi may have the potential to reduce economic inequality thereby giving more Ghanaians access to the best financial investments, while eliminating the boundaries in finance and equalizing the opportunity structure and access to investments.

The Ghanaian economy is open to many Cryptocurrency companies that promote Decentralised Finance like Yellow Card which gives citizens the opportunity to buy and sell bitcoin at minimal prices and rates. You can use your bitcoin for daily transactions with companies and enterprises that accept payment in bitcoin. Moreover, you may also want to send some bitcoin to friends and relatives who have Yellow Card accounts free of charge.

All they need is their Yellow Card Account email or mobile number. Yellow Card through its DeFi model is aimed at bringing financial inclusion for everyone, everywhere in Ghana.

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