Bank of Ghana Governor Dr. Johnson Asiama highlighted persistent risks in the banking sector despite improvements, warning that the non-performing loan (NPL) ratio, though down to 18.7 percent in February 2026 from 22.6 percent a year ago, still poses a major threat.
Speaking at the 129th Monetary Policy Committee (MPC) press conference, Dr. Asiama attributed the decline to rising bank credit and a shrinking NPL stock. “Despite improvement in asset quality, the NPL ratio remains a key risk to the banking sector,” he stressed. The central bank has introduced measures to fully implement regulatory guidelines aimed at curbing NPLs industry-wide.
Banking performance strengthened overall in February, with total assets expanding on the back of domestic deposits, borrowings, and shareholders’ funds. Investments surged 57.5 percent, far outpacing the 8.6 percent growth seen in February 2025. Financial soundness indicators profitability, liquidity, solvency, asset quality, and efficiency—all advanced.
Global and Domestic Economic Pressures
Dr. Asiama noted global headline inflation’s downward trend but flagged renewed concerns from surging oil prices amid conflicts disrupting supply chains, boosting crude volatility, and raising financial stability risks. “Depending on the intensity and duration of the conflict, these developments could weigh on the global economic outlook,” he said, adding that accommodative financing conditions might tighten soon.
Domestically, provisional data from the Ghana Statistical Service showed real GDP growth accelerating to 6 percent in 2025 from 5.8 percent in 2024, with non-oil GDP hitting 7.6 percent, fueled by services and agriculture. High-frequency indicators signal continued momentum: the Composite Index of Economic Activity grew 8.4 percent year-on-year in January 2026, up from 6 percent.
Bank credit to the private sector, industrial output, trade, and household/firm consumption drove the uptick. February confidence surveys reflected optimism consumer sentiment rose with easing inflation and brighter prospects, while businesses reported hitting targets amid improving macro conditions.
Story by: Mercy Addai Turkson#ahotorfmonline.com
