Author name: Dr Maxwell Ampong

In the busy streets of Accra, a young executive assistant enters a local waakye spot. Instead of paying immediately, she enters a code and chooses Credit, a Buy-Now-Pay-Later (BNPL) plan. The cost? Around 40 Ghana cedis, divided over four weeks. It’s a small amount for a simple meal. Yet, in that moment, we catch a glimpse of a quiet revolution reshaping urban life in Ghana. BNPL is now woven into everyday life. It’s no longer just for smartphones or cars; it’s financing school uniforms, groceries, and even basic health treatments. This shift is steadily changing the pace of city living and has given rise to non-banking credit and loan institutions. Admittedly, I run a microfinance enterprise myself, although I am not promoting it as much as my other businesses, yet (www.WellMaxCredit.com). So, believe me when I tell you, the moment people hear an interest rate twice the national GRR, it’s already a yes. Globally, the BNPL industry is expected to surpass US $560 billion in 2025 (FinTech Futures, 2025). In Africa, the model’s appeal is clear: low barriers to entry, mobile-first interfaces, and a generation increasingly comfortable with digital finance (Mastercard BNPL in Africa Report, 2024). However, with opportunity comes risk, and the stakes for African cities are uniquely high. Why BNPL is booming in African cities Three forces are driving the BNPL surge across the continent. Smartphone penetration Affordable devices and mobile internet have given millions access to digital marketplaces where BNPL is baked into checkout processes (Mastercard BNPL in Africa Report, 2024). Informal economies A large share of urban workers operate outside formal banking systems. BNPL offers them flexible, low-friction access to goods and services (McKinsey Informal Economy Trends Report, 2024). Cultural aspirations Rising urban populations, fuelled by a young demographic, are eager to access modern lifestyles, and BNPL makes aspirational spending feel attainable. Companies are tailoring BNPL models for local realities, targeting everything from laptops to fertiliser. Yet, beneath this innovation lies an uncomfortable truth: when we have to access our basic essential purchases through financing, it is a sign that the social fabric is under significant stress. The danger of normalising debt for survival Historically, credit served as a lever for investment, like financing a house, an education, or a business. Today, BNPL is increasingly used for essential spending: meals, work shoes, and utility bills. This shift is subtle but profound. It risks creating a new class of “credit-dependent citizens” whose monthly budgets are built on fragmented, deferred obligations. In Accra, informal surveys estimate that up to 30% of BNPL users have at least three concurrent instalment plans (McKinsey Informal Economy Trends Report, 2024). Many rotate repayments to stay afloat, effectively juggling micro-debts to maintain a semblance of normalcy. Without careful regulation and financial education, this could spiral into systemic fragility. I have discussed this with the Micro-Credit Association of Ghana. There is strong interest in exploring nationwide frameworks for responsible BNPL lending and linking it to broader financial inclusion goals. BNPL’s impact on urban resilience Why does this matter beyond individual households? It’s because financially vulnerable citizens weaken the economic resilience of entire cities. This erosion manifests in multiple, interconnected ways that quietly but decisively destabilise the foundations of urban life. Lower household savings When instalments consistently eat into future income, families are left with little or no capacity to absorb financial shocks. This leaves them vulnerable to emergencies and everyday fluctuations: a rise in food prices, a sick child, or a delayed salary. Over time, this erodes intergenerational wealth as parents struggle to save for their children’s education or invest in long-term goals. Weaker consumer confidence In an environment where BNPL obligations already fragment disposable income, consumer spending becomes reactive rather than strategic. People buy only what they need immediately, often in smaller quantities, which reduces bulk purchases and negatively impacts overall business margins. This volatility makes it more challenging for SMEs to forecast demand, manage inventory, or access credit effectively. Higher mental health burdens The emotional toll of juggling repayments, dodging defaults, and living under constant financial uncertainty is severe. Persistent financial anxiety is closely linked to depression, low self-worth, and in some cases, substance dependency (World Health Organization, 2024). As stress compounds, it can affect productivity at work, relationships at home, and even physical health. Reduced civic engagement Citizens trapped in a cycle of economic survival have reduced time and energy for community life, whether it’s volunteering, attending town meetings, or participating in local initiatives. This undermines social cohesion and trust, both of which are essential for stable, resilient urban environments. Urban fragility doesn’t begin with crumbling roads or traffic congestion. It begins with individuals forced to navigate daily life without the essential cushion of financial security. Cities flourish when people can plan, invest, and dream. Unchecked BNPL dependency transforms ambition into anxiety and undermines the fundamental concept of sustainable urban development. Policy interventions: Building healthy credit ecosystems BNPL is not inherently bad. It can be a powerful tool for inclusion if managed wisely. However, like any powerful tool, it requires guardrails, feedback loops, and a deep understanding of how it interacts with vulnerable communities. African regulators, FinTechs, civic leaders, and even educators must collaborate to shape an ecosystem that balances access with protection. Cap effective interest rates Some BNPL models mask high fees as “service charges.” These add up quickly, especially when users carry multiple loans. Transparency must be enforced. Clear legal definitions should distinguish between service fees and disguised interest. Policymakers should mandate disclosure of the total cost of credit, perhaps in local languages, using examples that reflect everyday purchases. Mandate plain-language contracts Contracts must be readable at a secondary school level and structured so that the most critical terms (interest rate, penalties, duration) appear upfront. A consumer should not need a lawyer to understand a loan agreement. Regulators might also explore using iconography and simplified “credit scorecards” so customers can compare offers like they do prepaid bundles. Integrate repayment data into credit bureaus A well-managed BNPL repayment history

A young teenager started screaming in pain. It came out of nowhere. She drew in breaths with much difficulty and her breathing became harder. She began to have all-round body pain which was inexplicable, at first. This got her extremely dizzy and really weak. Then came a tinge a jaundice in her previously bright eyes. The condition was reoccurring. Her family had sought medical advice but not everyone can afford a doctor every time for a condition that seems to come and go at will. Plus it gets costly. So out of love, and a desperate need to help her ailing child, a mother sought help from a self-proclaimed “prayer warrior” who advised that the child be bathed with ‘holy water’ at the church camp where the kid was to stay for two weeks. During another painful episode, the child got bathed in the middle of the night, with cold water, made pure and ‘holy’. What happened next? Did the child get better? Stay anywhere in Africa for a while with your eyes and ears wide open and you would know that the above story is probably true somewhere at some point in time. I totally fabricated this one though because I imagined a sickle-celled individual, in a painful crisis, being bath with cold water, in a scenario like that. Do you know what happens when someone in that condition gets cold water poured all over him or her? I didn’t know before. I know now. Do you? Why should you even know? Because a child with sickle cell would likely die in that scenario and this is true. Doctors might inform on a condition yet those around the afflicted, those that care but aren’t well-informed, those that don’t know you but affect the situation indirectly, how do they help? How do you get them to help, to care. The answer: ADVOCACY. It is the simple, public, well-intended support for or recommendation of a cause or an action. You get to choose your pick. We’ll still stick to the facts. This remains an opinion piece. What really IS Advocacy? Remember the Ice-Bucket Challenge? Almost everybody heard of it. Most people partook in it. It raised a lot of money and awareness for the cause. The thing is I doubt a huge portion of those that dropped iced cold water on themselves understood why and what they were doing. It got very trendy very fast and I liked that it did. Because it worked for the cause. When Bill Gates does something in the public eye, the International Federation of Dorks, an organisation I believe totally exists, will follow suit. When Kylie Jenner does same, massive mimicry amongst influencers ensues. And it goes on. That is how the Ice Bucket Challenge became so widely popular. It is actually the ALS Ice Bucket Challenge, intended to bring attention to Lou Gehrig’s disease, known as Amyotrophic Lateral Sclerosis (ALS). This exercise raised over $155 million. Think of all the good that money did, or could do. That public support for the ALS cause, that is advocacy. Advocacy, in your own way, is saying “hey, I myself want to know more about this plight, then I want you to know more about it too, then I want you and I to do something about it together to make it better”. And actually taking a step to do all three. Why is Advocacy important? Think voting. Think of how powerful your ONE thumb can be when it joins forces with millions of others with similar intentions. That’s why advocacy is important. We all want something different about the world we live in, something a little bit better. Big corporations and governments have powerful effects on real-life situations but so is the public when we join forces. There is nothing more urgent than people uniting with one voice. Advocacy can change things faster than waiting on the powers that be to effect that change. Get a voice on an issue that’s important to you. Defend and safeguard the rights of the afflicted in that instance. Have their wishes materially considered in your decision making. And you can become an instrument of real change. The NGO Problem. In the UK, I know for a fact that at the very least, misappropriation of funds or failure to follow proper financial procedures and filings would lead to an immediate investigation of an NGO, with the findings published publicly for all to see. Running and managing an NGO is not easy. However, it is widely acknowledged that we have an accountability problem with NGOS here in Ghana, generally speaking. This is not to discredit the good and hardworking people fighting for the poor and the needy. I’m simply saying that easily measurable performance indicators and education on impact guidelines would significantly improve the situation. My aim is not to be unnecessarily verbose, as some problems do not need to be overstated. I believe solutions should be explored more until some are effective. I have just shared my two cents on the matter. I will express it again in much clearer words, to whom it may concern: HELP the NGO’s over here by EDUCATING them on WHAT TO DO to have a bigger IMPACT the RIGHT WAY, since many (and I) can claim massive ignorance on subject matters we genuinely care about. Then investigate and take appropriate action on those that fail to follow set guidelines, both existing and forthcoming. So, what prompted this Advocacy thing? The story goes (a real story this time) that the forever gracious Nancy Nwadire reached out one day a long while back, and we had one of those creatively fulfilling conversations that make you go “ok, that was nice.” She’s really fantastic, you know, founder of the leading luxury fashion brand ICONIC INVANITY. She put me in touch with another gift to Africa, and I felt inspired. A few of my close friends have sickle-cell anaemia. So I have, at one point or many

Ghanaians see the evidence of economic wear-and-tear every day. Potholes often appear soon after a road project is commissioned. Power plants operate below capacity within a decade. Irrigation projects are abandoned after only a few seasons. They are signs of an economy where capital depreciates quickly, slowing the path to long-term growth.  Economists have long studied this problem through the Solow growth model, a framework that explains how capital, labour, population growth, and technology interact to shape economic outcomes. I’ll try to explain the Solow model in accessible terms and explore what it means for Ghana. We will examine how depreciation, capital and labour shares, population growth, and technology influence growth trajectories. Although the model can seem abstract, its lessons are highly practical: Ghana’s future prosperity depends not only on building more but also on ensuring what we build lasts, is inclusive, and is complemented by productivity gains. The Solow Model in Plain Language The Solow model, developed in the 1950s by Robert Solow, remains a fundamental part of growth economics. It explains how output in an economy is produced using capital (machines, infrastructure, buildings), labour (workers), and technology (the know-how that makes both productivity). A key idea is the concept of the steady state, which is a point where investment in new capital is just enough to replace the capital that depreciates each year. In simple terms, think of a farmer with a set of tools. Each season, the farmer can save some harvest to buy or repair tools. But tools also rust and break down. If the farmer saves enough, they can maintain or expand their toolkit and produce more in the future. If not, output stagnates or even declines. Ghana’s economy operates on the same principle. The Solow model helps us see three critical dynamics: With this framework, we can examine Ghana’s growth challenges. Depreciation and Ghana’s Infrastructure Challenge Depreciation is arguably the most visible issue in Ghana’s economy. In the Solow model, a higher δ (depreciation rate) raises the break-even line. This indicates that more of today’s investment is used solely to replace worn-out capital, leaving less room for expanding capital per worker. Consequently, the steady-state level of output per worker decreases. In Ghana, depreciation is evident everywhere, from roads to transmission losses in the national grid to water and irrigation projects in decline. High depreciation weakens fiscal planning. The government borrows heavily to fund new projects, but without proper maintenance, the growth benefits are short-lived. Instead of reinvesting in capital (machines, buildings, land, financial assets), Ghana finds itself in a cycle of rebuilding. The Solow model warns us that without reducing δ (depreciation rate), our economy risks stagnation. Capital and Labour in the Solow Framework The Solow model also reminds us that growth is not only about how much we produce, but about how the rewards are shared between those who own machines and money (capital) and those who do the work (labour). In simple terms, part of the economic pie goes to investors and part goes to workers. If more goes to capital, investors benefit more; if more goes to labour, wages improve. In Ghana this balance matters. In sectors like mining or oil, much of the profit flows to capital owners, often abroad, while workers see relatively little. In the informal sector, many people work but earn very low and unstable wages. If the share going to labour keeps shrinking, inequality grows, and the wider society feels the strain. The lesson is that Ghana needs growth that improves both capital and labour. Investment in machines and infrastructure should make workers more productive and better paid, not replace them or leave them behind. Population Growth and Ghana’s Demographic Path Population growth enters the Solow model through the break-even investment line: (δ + n)k. A higher population growth rate means more workers, but also more capital dilution. Investment must stretch further to maintain capital per worker. Ghana’s population is growing at around 2% annually. This creates both opportunity and risk: The Solow model demonstrates that when ‘n’ (population growth) falls, steady-state capital per worker increases, meaning each worker has more capital to utilise. In countries with declining populations like Japan, this has led to higher capital intensity but also ageing challenges. For Ghana, the question is whether we can leverage our demographic trend through education, job creation, and urban planning, or if it will surpass the current capital stock. To put it more simply: if 10 workers share 10 tractors, each worker gets one. If 20 workers share the same 10 tractors, each worker gets half. Population growth without corresponding investment risks overwhelming the available tractors, machinery, and infrastructure. Technology and the Missing Piece Even if Ghana saves more, invests better, and manages its population well, long-term growth still depends on technology. Without new ideas and better ways of working, economies only climb to a certain level and then stall. In Ghana, technology is both the weakest point and the greatest opportunity for progress. Mobile money has already transformed how people access banking services. In agriculture, simple tools like weather apps or small machines could increase crop yields. In industry, adopting cleaner energy sources and modern equipment could make factories more efficient. The Solow model’s clear message is that without consistent improvements in productivity, Ghana risks becoming stagnant. Therefore, making technology adoption and innovation a national priority is vital. Policy Lessons for Ghana The Solow model offers Ghana some practical lessons.  First, we must take care of our roads, power plants, and schools so they last, because repeatedly rebuilding them wastes resources. Second, growth should boost workers’ wages along with investors’ returns. Otherwise, inequality will get worse. Third, our young population can be a strength if education and job creation keep up, but a burden if neglected. Fourth, more of our savings should fund our own growth to reduce reliance on external debt. Fifth, technology must go beyond being just a buzzword and be felt in everyday farming, trading, and industry. Sixth, better governance is