Ghana's central bank has voiced concerns about the banking sector's ability to boost private sector activity. This worry comes despite Ghana showing better economic health and stronger financial sector numbers.
Policymakers will examine if current money policies are truly affecting lending rates and credit growth. The concern centers on 'credit transmission,' which means how well changes in the central bank's policies lead to changes in bank lending to businesses and individuals. Dr. Johnson P. Asiama, Governor of the Bank of Ghana, stressed the need for a strong banking sector to drive credit expansion.
This issue fits into Ghana’s broader effort to stabilize its economy and promote growth. The Bank of Ghana aims to ensure that economic improvements translate into real benefits for businesses. This is especially important as Ghana considers a non-financing Policy Coordination Instrument with the International Monetary Fund (IMF).
Banking sector data from the Bank of Ghana’s March 2026 Monetary Policy Report shows key trends. Gross loans and advances grew by 15.6 percent to GHS 108.2 billion in February 2026. This was slower than the 25.2 percent growth seen a year earlier. Private sector credit also increased by 18.7 percent to GHS 103.7 billion. However, this figure is lower than the 26.9 percent growth recorded in February 2025.
Public sector credit contracted sharply by 27.8 percent to GHS 4.6 billion. This reduced its share of total industry credit to 4.2 percent, down from 6.8 percent a year before. Banks continue to invest heavily in short-term government securities. This concentration limits the funds available for private sector lending.
The services sector received the largest share of credit, accounting for 36.7 percent of total loans. Commerce and finance followed with 23 percent. Manufacturing maintained an 11 percent share of credit. The central bank did report positive developments in some areas. Both the total amount of non-performing loans and the industry’s non-performing loan ratio decreased in February 2026 compared to the previous year. Non-performing loans are loans that borrowers are not repaying as agreed.
The Governor specifically linked future banking sector reforms to Ghana's proposed 36-month non-financing Policy Coordination Instrument with the IMF. This agreement will include measures to improve monetary policy transmission. It will also focus on liquidity forecasting and the inflation-targeting framework. These steps are crucial for ensuring the financial system better supports Ghana's economic goals.
Market watchers will now observe how policymakers address these concerns during the 130th Monetary Policy Committee meeting. Decisions made there could influence bank lending policies and interest rates. The focus will be on measures that encourage banks to lend more to private businesses. This will help stimulate broader economic activity and job creation.