Bank of Ghana tightens oversight as non-performing loans stay high despite economic gains

The Bank of Ghana (BoG) has announced plans to intensify its oversight of the banking sector as non-performing loan (NPL) levels remain a concern, despite recent macroeconomic improvements.

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At the opening of the 125th Monetary Policy Committee (MPC) meeting in Accra, BoG Governor Dr. Johnson Asiama stated that although the sector has shown signs of resilience, with improved liquidity, profitability, and a capital adequacy ratio of 18.2% as of June 2025, the NPL ratio remains high at 23.1%, demanding continued regulatory vigilance.

“The banking sector remains stable, but the NPL ratio is still elevated, which requires our supervisory attention,” Dr. Asiama emphasized.

Gains in Inflation and Growth

Ghana’s economy is showing signs of recovery, according to the Governor. Headline inflation has declined consistently for six months, reaching 13.7% in June 2025, its lowest since December 2021.

This disinflation is credited to strong monetary and fiscal discipline, along with a strengthening cedi. Economic activity is also gaining momentum:

1. Q1 2025 GDP growth: 5.3%
2. Non-oil GDP growth: 6.8%
3. Composite Index of Economic Activity (May): +4.4%

Key growth drivers include agriculture, services, robust consumer demand, increased trade volumes, and a tourism rebound.

External Sector Strengthens

The BoG also reported a provisional trade surplus of $5.6 billion in H1 2025—over four times higher than the same period last year. Ghana’s current account surplus rose to $3.4 billion, with the cedi appreciating:

1. +42.6% against USD
2. +30.3% against GBP
3. +25.6% against EUR

These gains are attributed to increased exports (gold, cocoa), strong remittances, and renewed investor confidence after positive IMF programme reviews.

Risks to Watch

Despite the improvements, Dr. Asiama cautioned the MPC to remain alert to looming risks:

1. Exchange rate volatility
2. Rising crude oil prices
3. Inflationary impact of new taxes under the mid-year budget

“We must support recovery without compromising the hard-won gains in stability,” he stressed.