Ghana’s banking sector is now positioned to withstand any economic shock - Elsie Addo Awadzi

The second deputy governor of the Bank of Ghana(BoG), Elsie Addo Awadzi has opined that Ghana’s banking sector is now robust and able to withstand any form of economic shock.

The Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi

She noted that the commercial banks in the country are now very stable, profitable and resilient following the cleanup undertaken by the central bank in 2017.

“The banking sector’s performance in 2021 to date has remained strong with sustained growth in total assets, deposits, loans, investments, and income, although credit risk remains a concern which the Bank of Ghana continues to monitor closely…”

According to her, the enabling macroeconomic framework, regulatory and supervisory reforms have promoted and ensured “good corporate governance, effective risk management, and innovation in the industry”.

Madam Addo Awadzi also noted that Ghana’s banking sector remains one of the most attractive on the continent for investors.

She said the presence of pan-African banks like First Bank Nigeria and international banks here is testimony to that.

Among other things, she added, banks have played a critical role in helping to mute the effects of the pandemic on our real sector by restructuring loans and suspending loan repayments for customers who were negatively impacted by the pandemic.

Banks provided new loans in the total amount of GHC 27,850,500,963.01 from March to December 2020 to sectors of the economy like the pharmaceuticals industry, the textiles and garments industry, that were critical in helping to fight the pandemic, and helped to accelerate the recovery of our economy from the initial downturn and to support corporates and households in a number of value chains.

She added that the banks are expected to lead the growth and recovery of the economy from the Covid pandemic effects.

We expect banks to continue in their efforts to support a strong recovery of the Ghanaian economy. To this end, we expect banks to significantly increase credit to the private sector, and to reasonable and affordable interest rates.

The second deputy BoG governor further touched on the high interest and lending rates by the commercials in the country.

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

“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.

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