Domestic Resource Mobilization

Domestic resources, defined here to include financial resources, human capital, fiscal revenue and remittances form an important engine of growth and poverty reduction. Ironically, after 52 years of independence, the economy of Ghana is yet to adequately and efficiently tap its natural and human domestic resources to accelerate growth in its key sectors such as industry and capacity development. The country on the other hand continues to draw heavily on external resources. Domestic financial resources can be harnessed from private savings, remittances, local investors, volunteerism, to mention but a few. Private savings, one of the major components of domestic resources in Ghana is low by African standards. Between 1980 and 2001, gross domestic savings as a percentage of GDP averaged 6.4% in Ghana, 37.4% in Botswana, 21.4% in Cameroon, 21.6% in Nigeria, 13.9% in Kenya and 7.3% in Malawi (WDI, 2003). It is worth emphasizing that most savings in Ghana,especially by the relatively poor, are held in the form of real assets which do not promote financial intermediation. This has been due to the political history of the country, low returns on savings, and limited financial intermediation. Also, access to credit remains a major bottleneck to private investment in Ghana and the reasons for this include credit risk, high cost of intermediation, lack of collateral, slow enforceability of contracts in case of default to mention but a few. This therefore calls for an investigation into the major constraints to domestic resource mobilization, in order to develop targeted government policies to address the bottlenecks. The wide-ranging issues that emerge call for closer

attention to what has been described as an economy-wide approach to DRM. ISSER organized a conference on these sub-themes under DRM in 2009 and plans to explore them further through expanded research.