Total credit extended by banks to the private sector and public institutions dropped significantly to GH¢4.68 billion in June 2025, compared with GH¢11.35 billion recorded in the same period last year, according to the Bank of Ghana’s (BoG) July 2025 Monetary Policy Report.
The sharp decline, representing a 142 percent year-on-year dip, was largely attributed to reduced credit flows to the public sector. Credit to the private sector also fell to GH¢6.69 billion in June 2025, from GH¢11.69 billion in June 2024.
The report noted that the slowdown in credit growth reflects banks’ increasing preference for investing in Government and BoG securities, which are considered safer and more sustainable in the current macroeconomic environment.
Despite the overall decline, the private sector continued to dominate lending, accounting for 95.05 percent of total outstanding credit in June 2025, up from 92.40 percent in the corresponding period of 2024.
Sectoral distribution of the credit showed that services absorbed the largest share at 76.53 percent, followed by commerce and finance (17.65 percent), electricity, gas and water (6.52 percent), manufacturing (4.55 percent), and agriculture, forestry and fisheries (4.12 percent).
Outstanding credit to the private sector stood at GH¢84.75 billion at the end of June 2025, compared with GH¢78.06 billion in June 2024. In real terms, however, private sector credit contracted by 4.48 percent, slightly higher than the 4.18 percent contraction recorded a year earlier.
The BoG noted that real private sector credit growth remains below trend, underscoring the challenges businesses face in accessing credit for expansion, as banks continue to prioritise low-risk investments.
