The Bank of Ghana (BoG) has announced plans to offload its share in the Agricultural Development Bank (ADB) to the government, as part of measures to address the inherent challenges state-owned banks are grappling with.
State-owned banks, ADB, and the National Investment Bank (NIB) over the years have been struggling to stay afloat.
Experts say the issues of these banks stem from governance issues, business models, and political interference among others.
Given the challenges of these banks, the regulator has indicated that it has committed to take drastic measures that will ensure their structural transformation.
In the second review of the International Monetary Fund’s (IMF) Economic Credit Facility Programme, the BoG indicated that with the strategy it is taking, it is expected to complete the structural reforms of these state banks by April 2025.
As part of its efforts, the Bank has also decided to divest its 64% shares in ADB to the government.
“In the meantime, strong measures adopted to address NIB’s challenges will also serve as a guide to help ADB, by linking recapitalization to inspection, governance reform, business model rationalization, and better risk management. The BoG aims to offload its share ownership in ADB to the government,” the bank stated.
BoG further indicated that its regulatory forbearance implemented in response of the Domestic Debt Exchange Programme (DDEP) will be lifted as soon as possible.
“Forbearance on the recognition of debt exchange losses in CAR [Capital Adequacy Ratio] computations will be lifted by one-third each year from January 2023 through end-2025. A schedule for lifting other temporary forbearances that were offered to the banking sector to facilitate the DDE [Domestic Debt Exchange], including those lowering minimum capital adequacy ratios (CAR), will be implemented,” the BoG indicated.
