Ghana’s central bank is pressuring commercial banks to increase lending to the private sector. The Bank of Ghana indicated that weak credit transmission stands as the next major challenge for economic recovery. Governor Dr. Johnson Pandit Asiama emphasized this point at the 130th Monetary Policy Committee meeting.
This push comes despite improving economic conditions and stronger financial sector indicators. Policymakers will assess if current monetary conditions effectively influence lending rates and credit expansion. The central bank is now focusing on how financial improvements can translate into productive lending and overall economic growth.
This situation fits into Ghana's broader economic story of shifting from macroeconomic stabilization to fostering real sector growth. Recent data from the Bank of Ghana’s March 2026 Monetary Policy Report highlighted a concerning trend. Banks held 65.0 percent of their investment portfolios in short-term government bills in February 2026. This was a sharp increase from 44.5 percent a year earlier. Conversely, long-term securities declined to 34.5 percent from 55.1 percent over the same period. This shows banks prefer short-duration assets even with better economic stability. Gross loans and advances grew by 15.6 percent to GHS 108.2 billion in February 2026. This growth was slower than the 25.2 percent recorded a year prior. Private sector credit increased by 18.7 percent to GHS 103.7 billion. This compares to 26.9 percent growth in February 2025. Public sector credit contracted by 27.8 percent to GHS 4.6 billion. Its share of total industry credit fell to 4.2 percent from 6.8 percent.
“This committee has to assess whether this is sufficiently effective in influencing lending conditions going forward,” Dr. Asiama stated. He questioned, “Will it continue to drive credit growth? Will it continue to support broader economic activity?” These statements reflect the central bank’s concern that economic improvements are not fully reaching businesses that need loans. The services sector received the largest share of credit, accounting for 36.7 percent of total loans. Commerce and finance followed at 23.0 percent, with manufacturing at 11.0 percent.
The central bank's focus reveals a national effort to ensure financial stability translates into job creation and business expansion. Decision-makers will be closely watching banks’ responses to this pressure. Markets will also monitor how changes in lending patterns affect economic output and inflation. Dr. Asiama noted new inflation risks from global energy prices and domestic energy supply disruptions. These could complicate monetary policy decisions. He stressed that a strong banking sector is essential for credit expansion. Future banking sector reforms will likely be linked to Ghana’s proposed 36-month non-financing Policy Coordination Instrument with the International Monetary Fund. These reforms aim to improve how monetary policy works, forecast liquidity, and better manage inflation targets.