The International Monetary Fund (IMF) has warned that Ghana’s banking sector reforms remain incomplete, despite what it describes as significant improvements in overall sector stability under the country’s ongoing economic programme.

Speaking on PM Express Business Edition on Thursday, IMF Mission Chief Dr Ruben Atoyan said while progress had been made, key vulnerabilities still needed urgent attention.

“Well, absolutely, the reforms need to be completed, that’s how we see that,” he said.

He noted that the banking sector had generally become stronger under the Extended Credit Facility arrangement, but warned that unfinished reforms could undermine the gains achieved so far.

“Overall, the strength of the banking sector has been improved drastically during the ECF arrangement,” he stated.

However, Dr Atoyan cautioned that risks remained, particularly regarding rising non-performing loans in parts of the system.

“The few remaining blocks will complete this agenda going forward, but where we do see risk that NPLs are still fairly high, especially among the state-owned banks,” he said.

He stressed that the trend in bad loans was a concern that required immediate regulatory attention.

“This needs to be addressed going forward,” he added.

According to him, while some level of loan default is normal in any financial system, the pace and scale of deterioration in asset quality could not be ignored.

“While it’s okay for some of the loans being defaulted, when you see the ratios going up, this is a non-performing loans ratio going up,” he said.

Dr Atoyan explained that the IMF expects stronger supervisory action from regulators to address these weaknesses and prevent further buildup of risk.

“This is something that we would like to be addressed by stronger supervisory action,” he noted.

He added that the IMF is actively working with Ghanaian authorities to strengthen oversight of the financial sector, particularly in areas where risks remain elevated.

Beyond commercial and state-owned banks, he also pointed to vulnerabilities in specialised financial institutions.

“Another sector, which needs to be addressed going forward, is specialised deposit-taking institutions (SDI),” he said.

He warned that these institutions could face future challenges if regulatory and supervisory gaps are not addressed.

“This is a sector where the future challenges need to be addressed,” he stated.

The IMF has consistently identified financial sector stability as a key pillar of Ghana’s economic recovery programme, alongside fiscal consolidation and monetary tightening.

While acknowledging progress, the Fund maintains that full stability will depend on completing reforms, strengthening supervision and addressing weaknesses in state-linked financial institutions.