The Bank of Ghana will enforce a 10% cap on non-performing loans (NPLs) across financial institutions by December 2026, Governor Dr. Johnson Asiama announced Tuesday.
The directive targets Ghana’s elevated 23.6% NPL ratio—significantly exceeding regional peers like Nigeria (4.2%) and South Africa (1%)—to restore banking sector stability.
“We’ll introduce measures to tackle persistently high NPLs,” Asiama told commercial bank executives in Accra, framing the move as critical to “restore asset quality and safeguard Ghana’s financial resilience.” The policy mandates write-offs for unrecoverable loans and restricts lending to willful defaulters, addressing moral hazards amplified by Ghana’s 2022 sovereign debt restructuring and 54% peak inflation in 2023.
Structural pressures underpin the crisis: the state owes GH¢67.5 billion ($6.6B) to local contractors and $2 billion to power producers, triggering contractor loan defaults. “All these contractors borrowed from Ghanaian-owned banks,” noted financial analyst Richmond Akwasi Atuahene. “Government payment would immediately improve bank solvency.”
This reform anchors broader post-crisis recovery efforts, confronting legacy arrears while enforcing disciplined lending to position banks for sustainable economic support.
