Ghana’s Banking Sector Gains Confidence as Systemic Risks Ease

Ghana’s banking sector appears to be regaining its footing after years of turbulence and uncertainty. The latest Monetary Policy Report (September 2025) by the Bank of Ghana (BoG) paints a cautiously optimistic picture of the financial landscape, revealing that the perceived risks to banks’ financial soundness are expected to moderate over the coming year.

This positive outlook follows the BoG’s Systemic Risk Survey (SRS) — a biannual assessment designed to gauge how banks view the stability of the country’s financial system. The July 2025 survey results suggest that sentiments around liquidity and solvency conditions have improved significantly, signaling renewed confidence in the system’s resilience.

Risk Sentiments Improving

The survey noted that banks’ perception of macroeconomic and financial market risks — such as inflationary pressures, currency volatility, and market instability — has declined in both likelihood and expected severity compared to earlier in the year. This reflects stronger fiscal controls, a rebound in economic activity, and the gradual recovery of private sector credit growth.

In particular, liquidity and solvency conditions, two key indicators of financial health, were viewed favorably by most respondents. The report attributes this to improved capital buffers and prudent asset quality management by banks, following reforms initiated by the central bank.

Lingering Global and Technological Risks

However, the report cautions that external shocks remain a concern. Respondents highlighted ongoing global geopolitical tensions — notably the Russia-Ukraine war, instability in the Middle East, and the U.S.-China trade disputes — as factors that could weigh on international trade and capital flows, indirectly impacting Ghana’s economy.

Additionally, banks flagged rapid technological innovation and artificial intelligence (AI) disruptions as emerging risks. While AI-driven technologies promise efficiency and innovation, their unpredictable pace and potential to reshape business models also raise operational and cybersecurity concerns within the financial ecosystem.

Strong Optimism for the Year Ahead

Despite these external headwinds, confidence in Ghana’s banking system remains robust. According to the survey, 82.6% of respondents expressed optimism that the stability of the financial system will remain high over the next year.

This optimism reflects growing trust in the Bank of Ghana’s regulatory framework, improved corporate governance across the sector, and the ongoing macroeconomic stabilization efforts spearheaded by the government.

The Bigger Picture

The moderation of systemic risks and improving sentiment among banks come at a critical time for Ghana’s economy. Following years of inflationary pressures, debt restructuring, and currency depreciation, the financial sector’s recovery will play a central role in driving sustainable growth.

If current trends hold, the next year could mark a turning point — with stronger capital adequacy, better risk management, and renewed investor confidence leading to greater credit expansion and economic activity.

The findings from the BoG’s survey offer reassurance that Ghana’s financial institutions are not only stable but are also adapting to an evolving global environment. Yet, maintaining this positive trajectory will require vigilance — especially in managing technological disruptions and mitigating global economic shocks.

Source: Accra Business News