Ghana’s banking sector has a clear roadmap to lower non-performing loans (NPLs) toward 10 percent by the end of 2026, the Bank of Ghana (BoG) has said.
Speaking before Parliament’s Committee on Economy and Development on Monday, BoG Governor Dr. Johnson Pandit Asiama highlighted that the banking system has strengthened significantly since the start of 2025, following the challenges posed by the Domestic Debt Exchange Programme (DDEP).
“Banks now have a clear roadmap to reduce NPLs toward 10 percent by end-2026,” Dr. Asiama told lawmakers, emphasizing that the progress in asset quality is a key element in stabilizing the financial system.
Non-performing loans, which are loans where borrowers have failed to meet payment obligations, have historically posed a major risk to Ghana’s banks. Elevated NPLs strain bank balance sheets, reduce profitability, and limit the ability of banks to lend to businesses and households. At the start of 2025, the sector faced high NPL levels, with the ratio reaching 21.8 percent, well above healthy thresholds, reflecting both the economic challenges and the residual effects of prior debt restructuring.
The reduction to 18.9 percent by December 2025, and the plan to lower it further to around 10 percent, marks a significant improvement. Dr. Asiama noted that this decline is the result of recapitalization efforts, strengthened supervision, and renewed market confidence. “A lower NPL ratio improves banks’ ability to extend credit, reduces risks to depositors, and strengthens overall financial stability,” he explained.
He also highlighted other signs of recovery: total bank assets expanded from GH₵368 billion to GH₵447 billion, deposits grew nearly 18 percent from GH₵276 billion to GH₵325 billion, and liquidity remains strong, with liquid assets covering about 96 percent of deposits. Gross loans increased from GH₵95 billion to GH₵111 billion, and cumulative new loan disbursements rose from GH₵80.95 billion in October 2025 to GH₵104.17 billion by December.
Dr. Asiama said the improvements in asset quality, alongside rising credit growth, reflect the banking system’s readiness to support Ghana’s economic recovery. “A stronger banking system means more credit flowing into the economy, where jobs and growth are created,” he added.
Reducing NPLs to around 10 percent would mark a turning point for the sector as it would allow banks to free up capital for lending, enhance profitability, and reduce the likelihood of future banking crises, while giving depositors greater confidence in the system.
