The banking sector exhibited a mixed performance in 2024, with robust asset growth alongside limited private credit expansion. According to the Wor
The banking sector exhibited a mixed performance in 2024, with robust asset growth alongside limited private credit expansion.
According to the World Bank Group’s 9th Economic Update on Ghana, the sector’s asset accumulation was fueled by increased liquidity, but a high-risk environment constrained lending to the private sector.
Asset Growth vs. Private Credit Expansion
Banks successfully grew their asset bases in 2024, but this expansion did not translate into proportional credit to businesses and individuals.
Elevated non-performing loan ratios signaled a cautious approach by banks, which preferred holding liquid assets or investing in low-risk government securities over providing credit to the private sector.
However, the report points to a positive turn in the first quarter of 2025, with private credit rebounding due to renewed investor confidence and improved macroeconomic conditions.
The World Bank states that the government’s fiscal consolidation and the Bank of Ghana’s tight monetary policy are beginning to restore confidence in the economy.
Key To Economic Recovery
A sustained increase in private credit is vital for business expansion, job creation, and overall economic growth.
The World Bank advises that to maintain this momentum, the government must continue its reforms to reduce risk in the economy, encouraging banks to channel more funds into productive sectors.
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