The International Monetary Fund (IMF) has raised concerns over rising non-performing loans (NPLs) in Ghana’s banking sector.

IMF Mission Chief Ruben Atoyan warned that stronger supervisory action is needed to safeguard recent gains in financial stability.

Speaking on PM Express Business Edition on Thursday, he said that while Ghana’s banking sector had improved significantly under the Extended Credit Facility programme, key vulnerabilities remain.

“Absolutely, the reforms need to be completed, that’s how we see that,” he stated.

According to him, the overall strength of the banking sector has improved “drastically” during the IMF-supported programme, but the reform process is not yet complete.

“The few remaining blocks will complete this agenda going forward,” he said.

However, Dr Atoyan cautioned that risks persist, particularly regarding rising non-performing loans.

“Where we do see risk, that NPLs are still fairly high, especially among the state-owned banks, and this needs to be addressed going forward,” he noted.

He stressed that while loan defaults are part of normal banking operations, the growing ratio of bad loans poses a broader systemic concern.

“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 explained.

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

The IMF Mission Chief said the Fund is currently working closely with Ghanaian authorities to address the challenges in the financial sector, particularly through tighter oversight and reforms.

He also pointed to additional risks within the financial system beyond traditional banks.

“Another sector, which needs to be addressed going forward, is specialised deposit-taking institutions (SDI), and this is a sector where the future challenges need to be addressed,” he said.

The comments come as Ghana continues efforts to stabilise its financial sector following years of restructuring, recapitalisation and regulatory tightening under the IMF programme.

While progress has been made, the Fund is signalling that the next phase of reforms will require deeper action to address asset-quality challenges, especially in state-linked financial institutions.