Ghana’s banking sector exhibited mixed performance in 2024, characterised by robust asset growth alongside limited private credit expansion, according to the World Bank Group’s 9th Economic Update on Ghana.

The June 2025 edition of the report highlights that while increased liquidity fuelled significant asset accumulation, a high-risk environment constrained lending to the private sector.

The World Bank’s analysis notes that while banks successfully grew their asset bases in 2024, this expansion did not translate into proportional credit to businesses and individuals.

This was partly due to elevated non-performing loan (NPL) ratios, which signalled a cautious approach by banks. In a high-risk lending environment, banks tend to prefer 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.

“In the first quarter of 2025, private credit rebounded, driven by renewed investor confidence and improved macroeconomic conditions,” the World Bank states.

This rebound suggests that the government’s fiscal consolidation and the Bank of Ghana’s tight monetary policy are beginning to restore confidence in the economy.

The financial sector’s performance in early 2025 is seen as a key indicator that Ghana is on the right track towards 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.