Banks in Ghana wrote off GHS394.8 million as bad debt in February 2026. This figure marks a substantial increase of 43.4% compared to the GHS275.2 million provision made in February 2025. The write-offs cover loan losses, depreciation, and other bad debts. These numbers were detailed in the Domestic Money Banks Income Statement.
The underlying cause for these write-offs is the elevated asset quality risks within the banking sector. While the industry's overall Non-Performing Loan (NPL) ratio improved, falling to 18.4% in February 2026 from 22.6% in February 2025, this figure does not tell the full story. The Bank of Ghana's March 2026 Monetary Policy Report confirms that these risks persist. The NPL ratio, when adjusted for fully provisioned loans, also saw improvement, dropping from 8.9% to 5.4% over the same period. Furthermore, the total stock of NPLs decreased by 5.8% to GHS19.9 billion by February 2026.
This trend of rising bad debts is seen against a backdrop of a challenging economic environment for Ghana. High interest rates and a slowdown in credit growth have put pressure on borrowers. The banking sector has been working to clean up its balance sheets after a period of significant economic headwinds. Elevated NPLs can reduce a bank's profitability and its ability to lend more money to businesses and individuals. This impacts the overall flow of credit in the economy, which is crucial for growth.
Dr. Johnson Pandit Asiama, the Governor of the Bank of Ghana, has previously indicated the central bank's commitment to ensuring financial stability. His statements often emphasize the importance of robust risk management practices within financial institutions. The report from the Bank of Ghana, specifically the Monetary Policy Report, serves as the primary source for this data. It is a key document that economists and investors watch for insights into the health of Ghana's financial system.
The continued high levels of debt write-offs suggest that banks are aggressively addressing their risky loans. This proactive approach, while costly in the short term, is necessary for long-term financial health. The decline in the NPL ratio is a positive sign, but the substantial write-offs indicate that many loans have already become irrecoverable. The private sector accounts for the vast majority of these non-performing loans, with its share increasing to 98.1% in February 2026 from 96.2% in February 2025. This underscores the significant impact on businesses operating in Ghana.