Banking
From The Report: Ghana 2016
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Despite the challenges faced in the economy in general – for example, the decline in the currency, the rise in government debt, low commodity prices and a persistent deficit – the Ghanaian banking sector has remained profitable and well capitalised. The country’s lenders have managed not only to survive but also to thrive. The banking sector is highly competitive and open, albeit somewhat crowded. The country has 28 deposit money banks, 60 non-bank financial institutions, 138 rural and community banks, and 503 microfinance institutions.

This chapter includes an interview with H A Kofi Wampah, Governor, Bank of Ghana (BoG).

Articles from this Chapter

Overview

Rising competition: The sector is strong and profits are up, but questions remain about the longer-term outlook
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Despite the challenges faced in the economy in general – for example, the decline in the currency, the rise in government debt, low commodity prices and a persistent deficit – the Ghanaian banking sector has remained profitable, growing and well capitalised. The country’s lenders have managed not only to survive but also to thrive. Profit Growth Net profits in the sector grew 35.5% in 2014 and 60.3% in 2013, according to Bank of Ghana (BoG) statistics, while total assets of the sector grew…

Interview

Restoring stability: OBG talks to H A Kofi Wampah, Governor, Bank of Ghana (BoG)
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Interview:H A Kofi Wampah How can the BoG reduce pressure on the cedi? H A KOFI WAMPAH: To tighten policy we must increase the policy rate in the short term. This means that banks will raise their lending rates, which will reduce credit. We have seen a trend whereby the demand for foreign exchange (forex) increases along with the credit available in the market, and this has put even more pressure on the cedi. Credit recipients can demand forex based on the credit banks extend them, or if…

Analysis

Capital ideas: Banks remain well capitalised and liquid
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The banking sector underwent a major round of recapitalisation between 2008 and 2012, when institutions were required by the regulator to increase their minimum capital from GHS7m ($1.9m) to GHS60m ($16.7m), and this lifted the relevant ratios, which were already high, to levels that suggest safety and soundness by a comfortable margin. Above & Beyond The Banking Act 2004 sets the minimum ratio at 10%, while the cash reserve requirement is fixed by the central bank, the Bank of Ghana (BoG).…

Analysis

Smart payments: Progress is being made in the development of more advanced electronic banking solutions
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As an early adopter of technologies that allow for the quick and easy transfer of funds, Ghana has maintained a highly efficient payments system. It is at present moving rapidly towards making the country’s commerce as cashless as possible. The latest push towards smart payments should further improve the transparency of transactions, reducing what has traditionally been a largely cash-dependent society. While challenges exist in terms of public acceptance and the costs of some services, these…