With inflation easing to 3.8 percent, the lowest level since Ghana adopted inflation targeting, the Bank of Ghana (BoG) is redirecting its supervisory focus from crisis containment to the structural strengthening of the banking sector, marking a new phase in post-stability financial sector reform.
At a post-Monetary Policy Committee (MPC) engagement with chief executives and heads of banks in Accra on Wednesday, Governor Dr. Johnson Pandit Asiama indicated that with macroeconomic stability restored, attention must now turn to reinforcing the underlying architecture of the financial system.
The MPC at its 128th meeting in January reduced the Monetary Policy Rate by 250 basis points to 15.5 percent, citing inflation that had declined “faster than anticipated” and expectations that remain “well anchored.” Headline inflation fell from 23.8 percent in December 2024 to 5.4 percent by December 2025, and further to 3.8 percent in January 2026.
The Governor noted that monetary conditions remain “sufficiently tight” relative to prevailing inflation dynamics, but stressed that the policy conversation must evolve beyond stabilisation. With regulatory reliefs now concluded, he said, the discussion must shift “from resilience to structure.”
Over the past year, the central bank conducted a thematic review of banks’ business models, assessing funding structures, asset allocation patterns, earnings composition, and governance effectiveness under baseline and stress scenarios. The review confirmed that the sector remains “viable and profitable,” but also identified structural features that require closer reflection as macroeconomic conditions normalise.
Going forward, business model analysis will become an embedded component of supervisory assessments, aimed at supporting the “early identification of emerging risks” and enabling timely policy responses. The move signals a more forward-looking supervisory posture, with greater emphasis on the sustainability of earnings and balance sheet composition.
Although non-performing loans have declined, they remain above benchmark levels. As credit conditions ease and private sector lending begins to recover, the Governor cautioned that underwriting discipline and sectoral risk assessment will be critical to avoid a renewed build-up of asset quality pressures.
He called for stability to translate into “purposeful intermediation,” particularly in agriculture, manufacturing, small and medium-sized enterprises, and other value-adding sectors. The objective, he noted, is to deepen credit flows into productive segments of the economy without reintroducing systemic vulnerabilities.
The broader macroeconomic backdrop has improved meaningfully. Real GDP expanded by 6.1 percent in the first three quarters of 2025, supported largely by services and agriculture. The Bank’s Composite Index of Economic Activity points to sustained momentum across trade, industrial output, private sector credit, and consumption, while business and consumer confidence have strengthened amid easing inflation and exchange rate stability.
Fiscal consolidation has also reinforced the recovery, with a lower deficit, a strong primary surplus, and a decline in public debt. On the external front, strong export earnings and private transfers have supported a balance of payments surplus and a build-up in reserves, providing additional buffers.
Within this stabilised environment, the Governor emphasised that the next phase of reform is about durability. Structural strengthening, he suggested, must encompass stronger business models, disciplined innovation, and sound governance practices that can withstand future shocks.
The central bank, he assured industry leaders, will continue to engage as a “firm, fair, and forward-looking partner,” supportive where necessary but clear in its expectations. With inflation at historic lows and policy credibility reinforced, the focus is now firmly on ensuring that Ghana’s banking sector is not only stable but structurally positioned to support long-term economic transformation.
