Across the West African sub-region, commercial banks operate under varying degrees of macroeconomic pressure and regulatory oversight, however, when compared on financial stability and asset quality across neighboring economies, Ghana stands out as a dramatic regional anomaly.
In a critical review of non-performing loans (NPLs) in the Ghanaian banking industry, financial and banking consultant Dr. Richmond Atuahene highlights that while regional peers have successfully contained toxic assets, Ghana has suffered from a decade of chronic, double-digit bad loan ratios.
This situation has greatly impacted the financial stability and asset quality of commercial banks in Ghana.
The Regional Divergence: Ghana vs. West African Peers
Dr. Atuahene’s findings present a stark contrast between Ghana and its ECOWAS neighbors. While surrounding economies have maintained controlled banking risk, Ghana’s loan quality has severely deteriorated.
Côte d’Ivoire: Maintained a healthy, controlled NPL ratio of 6.4%
Togo: Recorded an equally low NPL ratio of 6.6%
Nigeria: Stood at 7.0% at the end of December 2025 after withdrawing pandemic forbearance (having previously averaged around 4.0%)
Burkina Faso: Reported 8.8%, considered relatively high within the West African Monetary Union, yet still below single digits
In contrast, Ghana logged an average NPL ratio of 18.07% over the 2016–2025 decade, far exceeding the international financial stability threshold of 10% established by banking literature. Ghana’s bad loans closed 2025 at 18.90%, after surging to a crisis peak of 26.7% in early 2024.
The August 2026 Trajectory: Better, But Still High
According to recent Bank of Ghana (BoG) data, Ghana’s NPL ratio improved to 15.7% as of August 2026. While this moderation reflects aggressive loan write-offs and tighter credit underwriting, Dr. Atuahene’s analysis stresses that 15.7% remains excessively high.
It is nearly double the NPL levels of neighboring Côte d’Ivoire or Togo and far above the central bank’s targeted 10% prudential ceiling.
Why Ghana Outpaces Its Neighbors in Bad Loans
Dr. Atuahene attributes Ghana’s regional outlier status to unique structural vulnerabilities that do not plague its regional peers to the same extent.
Sovereign Debt Shocks: The 2022–2023 Domestic Debt Exchange Programme (DDEP) forced Ghanaian banks to absorb GH¢19.5 billion in impairment losses, a shock absent in neighboring banking sectors.
Government Payment Arrears: Unpaid sovereign debts, including US$1.6 billion in energy arrears and GH¢35 billion in contractor payables, starved local firms of cash, forcing defaults.
Ownership Disparities: Unlike foreign subsidiaries with strict parent-level underwriting, Ghanaian domestic banks carry heavy exposure to high-risk local sectors and state contractors.
The Bottomline
For Dr. Atuahene, until legacy debts are settled and judicial debt recovery is streamlined, Ghana will remain West Africa’s primary outlier in banking sector bad loans.
