Banking
From The Report: Ghana 2017
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The Ghanaian banking sector had a difficult year in 2015, amid weakening macroeconomic conditions in the country. Growth fell below the rate seen in 2014, while non-performing loans rose significantly. However, banks used 2016 to retrench, lower their risk exposure and attempt to turn around weaknesses in their loan portfolios that were held over from 2015. Additional uncertainty created by the general election in December 2016 reinforced conservative behaviour, but the sector’s prospects in 2017 are promising. The industry remains one of the economy’s brightest performers, and the large unbanked population offers plenty of scope for expansion.

This chapter contains an interview with Abdul-Nashiru Issahaku, Governor, Bank of Ghana.

Articles from this Chapter

Overview

By all accounts: Growth has slowed but the sector’s prospects remain strong
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The Ghanaian banking sector had a difficult year in 2015, amid weakening macroeconomic conditions in the country. Growth fell below the rate seen in 2014, while non-performing loans (NPLs) rose significantly. However, the sector remains one of the economy’s brightest performers, and the large unbanked population offers plenty of scope for expansion. Indicators While total banking sector assets increased by 23% to GHS63.4bn ($16.4bn) in 2015, growth fell below the 42% the sector enjoyed…

Analysis

Credit conundrum: Limited lending to small businesses remains an issue
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Lending to small and medium-sized enterprises (SMEs) in Ghana has slowed in late 2016. In light of rising non-performing loans (NPLs) in 2015, banks have slimmed down their lending books significantly. With interest rates for blue-chip borrowers in established sectors of the economy surpassing 30%, rates for SMEs can often go far higher. This is not unusual for emerging and frontier markets; low levels of SME lending can be found across the continent. This is in part a reflection of higher levels…

Interview

Sustained success: Abdul-Nashiru Issahaku, Governor, Bank of Ghana, on growth and tightening monetary policy
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Interview:Abdul-Nashiru Issahaku What are your expectations for GDP growth in Ghana over the coming year? ISSAHAKU: Global uncertainties led to significant declines in the prices of the country’s main primary commodity exports: cocoa, gold and oil. This was exacerbated by protracted energy crises and sharp volatility in the domestic foreign exchange (forex) market. While global uncertainties largely remain on the back of Brexit, the worst of the energy crises seems to be over. Also, the…

Analysis

Lending a hand: Banks need more help to make credit decisions
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Working in concert with the International Finance Corporation, Ghana passed the Credit Reporting Act of 2007, which established licensing and operational guidelines for the credit referencing industry, and obliged financial institutions to share data with licensed credit bureaus. Since that time, Ghana has been slowly building its credit referencing capacity with the aim of expanding credit, with a particular focus on the small and medium-sized enterprise (SME) sector. “In the absence…

Analysis

Cash out: Efforts to increase the use of electronic payments
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The Payment Systems Act 662 of 2003 set Ghana on a path towards a system of electronic transactions. The cash-lite initiative envisions a transition from a cash-dependent economy to one that is heavily reliant on bank cards, mobile money, internet payments and other forms of modern cashless transactions. Since the act was passed, the Bank of Ghana (BoG) and Ghana Interbank Payment and Settlement Systems (GhIPSS) have developed the infrastructure to deliver the settlement and clearing services required…