In a decisive move to accelerate Ghana’s post-crisis recovery, the Bank of Ghana (BoG) has lowered its benchmark policy rate by 150 basis points, bringing it down to 14% from 15.5%. At the 129th Monetary Policy Committee (MPC) briefing held in Accra on Wednesday, Governor Dr. Johnson Pandit Asiama cited a significant improvement in the banking
sector’s health, highlighted by a sharp decline in Non-Performing Loans (NPLs).
The Governor noted that the "credit contraction" that defined 2024 and early 2025 has officially reversed, signaling a new phase of private sector-led growth.
1. The NPL Recovery: Cleaning the Balance Sheets
The most striking indicator of the sector's "reset" is the improvement in asset quality. Banks have successfully aggressively managed bad debt following the 2022–2023 economic shock.
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NPL Ratio (Feb 2025): 22.6%
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NPL Ratio (Feb 2026): 18.7%
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The Strategy: The decline was driven by intensified loan recovery efforts, strategic write-offs, and a surge in new, high-quality credit to the private sector.
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The Benchmark: Despite the progress, Dr. Asiama reminded the sector that the ratio remains above the 5% international benchmark, requiring continued vigilance.
2. Slashing the Cost of Borrowing
The MPC’s decision to cut the policy rate to 14% is designed to further lower the "cost of doing business" for Ghanaian entrepreneurs and households.
Lending Rate Comparison: | Metric | February 2025 | February 2026 | Change | | :--- | :--- | :--- | :--- | | Average Lending Rate | 30.1% | 19.2% | -10.9% | | BoG Policy Rate | 15.5% | 14.0% | -1.5% |
Dr. Asiama noted that this reduction is already translating into a "gradual increase in private sector credit," providing much-needed liquidity to the construction, retail, and manufacturing sectors.
3. Investment Surge and Asset Growth
The banking sector witnessed a massive 57.5% increase in investments over the past year, a staggering jump from the 8.6% growth recorded in 2025. This growth was fueled by:
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Domestic Deposits: Increased public confidence in the banking system.
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Shareholder Funds: Fresh capital injections into local banks.
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Risk-Return Profiles: Improved stability making financial assets more attractive to investors.
4. Roadmap for Sustained Stability
To ensure this recovery isn't temporary, the Bank of Ghana has introduced stricter regulatory guidelines:
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Enhanced Supervision: Closer monitoring of how banks manage credit risk.
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Loan Classification: Stricter enforcement of provisioning requirements to prevent "hidden" bad debt.
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Information Sharing: Improved use of credit bureaus to prevent "serial defaulters" from moving between banks.
The Bottom Line
The 129th MPC briefing marks a "Macroeconomic Reset." With the policy rate at 14% and lending rates falling below 20% for the first time in years, the BoG is betting on a "high-investment, low-interest" environment to power the 2026 economic agenda. As Governor Asiama concluded, the focus now shifts from "surviving the crisis" to "sustaining the growth."
