Ghana’s banking sector remains one of the most attractive on the continent for investors, Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi has stated.

According to her, the presence of pan-African banks like First Bank Nigeria and other international banks here is testimony to that.

“Our banking sector is stable, profitable, and resilient, supported by an enabling macroeconomic framework, regulatory and supervisory reforms that have promoted resilience, good corporate governance, effective risk management, and innovation in the industry”, she disclosed this at the 25 years Anniversary Celebrations of FBN Bank.

“Thanks to necessary and difficult reforms undertaken by the Bank of Ghana in recent years, and policy and regulatory reliefs announced at the onset of the Covid-19 pandemic, our banking sector was well-positioned to withstand the economic shock fairly well. Among other things, banks have played a critical role of helping to mute the effects of the pandemic on our real sector by restructuring loans and suspending loan repayments for customers who were negatively impacted by the pandemic”, she explained.

Mrs. Awadzi pointed out that banks provided new loans in the total amount of ¢27.8 billion from March 2020 to December 2020 to sectors of the economy like the pharmaceuticals industry, the textiles and garments industry, that were critical in helping to fight the pandemic, and helped to accelerate the recovery of our economy from the initial downturn and to support corporates and households in a number of value chains.

So far, she said the banking sector’s performance in 2021 to date has remained strong with sustained growth in total assets, deposits, loans, investments, and income, although credit risk remains a concern, which the Bank of Ghana continues to monitor closely as the pandemic rages on.

“We expect banks to continue in their efforts to support a strong recovery of the Ghanaian economy. To this end, we expect banks to significantly increase credit to the private sector, and to offer reasonable and affordable interest rates to their customers.”

BoG concerned about high lending rates

“We remain concerned about the relatively high lending rates that banks continue to charge their customers, with spreads over and above the Ghana Reference Rate and very high fees, commissions and other costs imposed on customers which lead to the exclusion of many small and medium-sized businesses out of the credit market and by extension, impedes their survival and growth”, Mrs. Awadzi said.

“As a nation, we lose significant opportunities to grow strong viable brands that can compete with businesses across the African market and beyond if we do not provide mechanisms for financing our small businesses on a consistent and sustainable basis” she noted.

The First Deputy Governor further said the Central Bank expect banks to deploy technology and strategic partnerships to promote access to finance for all segments of the economy through innovative products, services, and delivery channels.

She charged banks to also do more in the area of financing the transition to a greener and more sustainable economy, guided by the Sustainable Banking Principles launched in November 2019 by the Bank of Ghana, the Ghana Association of Bankers, and the Environmental Protection Agency.

She concluded saying “our banking sector will remain safe and sound, provide attractive returns to shareholders and other investors, while protecting the interests of depositors and other customers, the broader economy, communities, and the environment. This is critical for building a strong, viable, and sustainable industry and economy that will stand the test of time.”