Banking
From The Report: Ghana 2022
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Moves prior to the Covid-19 pandemic to shore up the banking sector proved prescient, as they put local institutions in an advantageous position to face the unique challenges posed by the health crisis. After a sector clean-up, both assets and deposits rose as asset quality improved, and higher minimum capital requirements ensured that banks were more resilient to shocks. This positive trend continued into the pandemic, bolstered by digitalisation initiatives aimed at both improving service provision for existing customers and attracting the previously under- and unbanked. While the sector is concentrated, with the top-five banks accounting for nearly half of total deposits in the country, the introduction of new technologies and products is expected to foster diversification as new players disrupt the sector.

This chapter contains interviews with Ernest Addison, Governor, Bank of Ghana; and Abena Osei-Poku, Managing Director, Absa Bank Ghana.

Articles from this Chapter

Overview

Sound footing: Measures designed to improve asset quality and boost resilience facilitated robust sector performance in 2020
OBG
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Moves prior to the Covid-19 pandemic to shore up the banking sector proved prescient, as it put local institutions in an advantageous position to face the unique challenges posed by the health crisis. After a sector clean-up, both assets and deposits rose as asset quality improved, and higher minimum capital requirements ensured that banks were more resilient to shocks. This positive trend continued into the pandemic, bolstered by digitalisation initiatives aimed at both improving service provision…

Interview

Safe and sound: Ernest Addison, Governor, Bank of Ghana (BoG), on ensuring stability and sustainability of the sector
OBG
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Interview: Ernest Addison How do you assess the soundness of Ghana’s banking sector, and how did it fare during the pandemic? ERNEST ADDISON: The BoG started comprehensive banking sector reforms in 2017, three years prior to the onset of the Covid-19 pandemic. Some of the measures that we took included recapitalisation of banks; an overhaul of the supervisory and regulatory frameworks; and a clean-up of the financial sector that resulted in the closure of about 400 insolvent institutions, comprising…

Analysis

Outsized impact: Government support schemes and a planned development bank prioritise funding for small and medium-sized enterprises
OBG
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The banking sector has played a key role in mitigating the effects of the Covid-19 pandemic on small and medium-sized enterprises (SMEs). Banking authorities and institutions moved swiftly to ease the economic pressure on SMEs and other entities in the early months of the crisis. In late March 2020 interest rates were cut by two percentage points starting the following month, and a six-month moratorium on principal repayments was granted to companies in the airline and hospitality sectors, which…

Analysis

Digital solutions: The launch of a financial technology office, innovation sandbox and digital currency are expected to boost financial inclusion
OBG
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Ghana is looking to leverage financial technology ( fintech) to boost participation in the banking sector, utilising digital services that are accessible and affordable to improve customers’ experiences. High levels of mobile phone penetration have facilitated this movement; Ghana boasts West Africa’s highest unique subscriber penetration rate, at 55% in 2020, above the sub-Saharan African average of 44.8%. The authorities are building on the momentum gained from the successful rollout of mobile…

Interview

Social dividends: Abena Osei-Poku, Managing Director, Absa Bank Ghana, on banks’ resilience and ethical investing
OBG
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Interview: Abena Osei-Poku To what extent did the banking sector successfully navigate the Covid-19 pandemic? ABENA OSEI-POKU: The banking sector demonstrated notable resilience during the pandemic, highlighting the fact that the sector is regulated, well capitalised and broadly profitable – despite strong competition. The sector has sufficient capital buffers to absorb potential losses from lending, even in the current challenging operating environment. Indeed, capital adequacy has consistently…