By Benjamin Nii Nai Anyetei
Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has expressed optimism that credit to the private sector will begin to rise in the coming months, as part of broader efforts to strengthen Ghana’s financial system and support economic growth.
Speaking at the 125th Monetary Policy Committee (MPC) press conference in Accra, Dr. Asiama acknowledged that the country has seen a consistent decline in real private sector credit since the start of the year. He, however, stressed that the trend is not new, pointing out that Ghana has historically lagged behind its peers in the subregion when comparing private sector credit as a share of GDP.
“This reality is behind the initiatives we have undertaken since I assumed office. Our objective is to transition into a regime where credit becomes a central focus for banks. As financial intermediaries, their core function is to mobilise funds from savers and channel them to productive users. Based on the data available to me, we are making steady progress toward that goal,” he said.
Dr. Asiama added that as private sector credit improves, inflation is expected to decline further. Treasury bill rates have already begun to fall, and the MPC has signaled readiness to adjust the policy rate in line with sustained disinflation.
On the issue of non-performing loans (NPLs), the Governor disclosed that the ratio currently stands at 23.1 percent, a level he described as requiring continuous supervisory attention.
“We have been actively working to address the issue of high non-performing loans. In response, we have recently issued new regulatory notices to banks aimed at tackling this challenge,” he noted.
He further explained that the central bank’s goal is not only to reduce NPLs but also to strengthen credit administration frameworks within commercial banks. He warned that Ghana’s financial sector is entering a phase where banks will need to depend more on the performance of their loan portfolios to generate returns, rather than relying heavily on high-yielding BoG bills.
“Soon, banks will need to rely more heavily on the performance of their loan portfolios to generate returns. This makes it imperative for them to enhance credit administration and reduce NPLs in order to sustain profitability in the evolving financial landscape,” Dr. Asiama stressed.
The Bank of Ghana has in recent years been working to clean up the financial sector after the 2017–2019 banking sector reforms.
