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Ghana’s banking sector one of the most attractive in Africa – BoG

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Elsie Addo Awadzi

Ghana’s banking sector remains one of the most attractive on the continent for investors, the Bank of Ghana (BoG) has said.

According to the BoG, the presence of Pan-African Banks like First Bank-Nigeria and international banks in the country are testimonies to that.

The Second Deputy Governor of the BoG Ms. Elsie Addo Awadzi said this at the 25th-anniversary gala dinner of FBN Bank.

“Our banking sector is stable, profitable, and resilient, supported by an enabling macroeconomic framework, regulatory and supervisory reforms that have promoted resilience, good corporate governance, effective risk management,” Ms. Awadzi stated.

She said the banking sector is attractive because of “difficult reforms undertaken by the Bank of Ghana in recent years, and policy and regulatory reliefs announced at the onset of the COVID-19 pandemic, our banking sector was well-positioned to withstand the economic shock fairly well”.

Ms. Awadzi further praised FBN Bank for its milestone of 25 years in the banking sector.

“We congratulate you, your shareholders, Board of Directors, Management, Staff, and customers, for making it a quarter of a century and for the significant achievements you have chalked thus far. We expect that you will continue to strategize to expand your footprints across the nation with more access points beyond your current 20 branches, by deploying additional branches, agents, and digital channels. We expect to see even more impact in our socio-economic landscape over your next 25 years and beyond, as you continue to pursue sound governance, risk management, and cutting-edge strategies to promote more inclusive and sustainable banking,” she stated.

Ms. Awadzi further noted that the BoG expects banks in the country to continue in their efforts to support a strong recovery of the Ghanaian economy. 

To this end, she said the BoG expects banks to significantly increase credit to the private sector, and to offer reasonable and affordable interest rates to their customers. 

“We remain concerned about the relatively high lending rates that banks continue to charge their customers, with spreads over and above the Ghana Reference Rate and very high fees, commissions, and other costs imposed on customers which lead to the exclusion of many small and medium-sized businesses out of the credit market and by extension, impedes their survival and growth,” she stated.

“As a nation, we lose significant opportunities to grow strong viable brands that can compete with businesses across the African market and beyond if we do not provide mechanisms for financing our small businesses on a consistent and sustainable basis,” she added.

Ms. Awadzi continued that the BoG expects banks to deploy technology and strategic partnerships to promote access to finance for all segments of the economy through innovative products, services, and delivery channels. 

She said: “Our youth population, women entrepreneurs, persons who are differently-abled, persons displaced by migration or extreme weather patterns or pollution of our water bodies and farmlands, are all viable customer bases waiting to be nurtured so that they can fully participate in helping to build a more resilient economy. 

“Banks must also do more in the area of financing the transition to a greener and more sustainable economy, guided by the Sustainable Banking Principles launched in November 2019 by the Bank of Ghana, the Ghana Association of Bankers, and the Environmental Protection Agency.” 

In sum, she expressed confidence that the country’s banking sector will remain safe and sound, provide attractive returns to shareholders and other investors while protecting the interests of depositors and other customers, the broader economy, communities, and the environment. 

This she said is critical for building a strong, viable, and sustainable industry and economy that will stand the test of time.

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