The Governor of the Bank of Ghana, Dr. Ernest Addison, expects an early recapitalization of banks to promote banking sector resilience.

"The banking sector remains sound, liquid, and profitable. The Bank of Ghana will continue to closely monitor banks’ capital restoration efforts in line with approved plans including through support from the Ghana Financial Stability Fund, following the impact of the Domestic Debt Exchange Programme (DDEP)", he disclosed at a meeting involving the International Monetary Fund Mission Chief for Ghana, Stéphane Roudet and the Minister of Finance, Ken Ofori-Atta..

 “We expect early recapitalization to promote banking sector resilience and effective financial intermediation to help speed up macroeconomic economic recovery going forward”, he stressed.

The stated capital of banks in Ghana presently stands at GH¢400 million (about $33.33 million). This was, however, eroded significantly by the about 49% depreciation of the cedi against the US dollar in 2023.

According to the November 2023 Monetary Policy Report, the banking sector’s shareholders’ funds declined in October 2023 relative to the same period last year, mainly reflecting losses from the Domestic Debt Exchange Programme (DDEP) which impacted the reserves of banks.

Shareholders’ funds contracted by 4.2% to GH¢25.4 billion in October 2023, compared to a growth of 11.9% in October 2022.

The decline in shareholders’ funds, the report attributed, to the slower growth in paid-up capital from 4.4% percent in October 2022 to 0.4% in October 2023.

The equity position of banks is, however, projected to improve as banks step up recapitalisation efforts to meet the 2025 deadline announced by the Bank of Ghana.