Dynamics and Drivers of Competition in the Ghanaian Banking Industry

This study examines the nature and the change in the level of competition in the various financial sub-markets in Ghana, a lower middle-income country and one of Africa’s emerging economies. We apply the recently developed Boone indicator on annual bank-level data of 22 banks from 2011 to 2020. We find the loan market to be the most competitive compared to the asset market and the fee-based services market. Over time, the nature of competition tends to change from being oligopolistic towards a more monopolistic structure. We find bank size and foreign ownership to contribute to the observed market power and the dynamics of the competition in the Ghanaian banking sector.