|
Getting your Trinity Audio player ready...
|
Ghana’s banking sector is poised for significant recovery and growth in the coming years, as the country navigates its way out of debt challenges and benefits from an improving business environment.
Fitch Ratings reports that Ghanaian banks recorded strong profits in 2023 and 2024, largely driven by high yields on treasury bills. These impressive earnings have been crucial in rebuilding the banks’ capital base, which suffered substantial losses during the Domestic Debt Exchange Programme (DDEP) in late 2022.
“While certain accounting practices have masked the full impact of these losses, sustained profitability will enable banks to restore their capital buffers by 2025,” Fitch noted. This recovery is expected to position most banks to meet regulatory capital requirements once temporary relief measures come to an end.
The DDEP officially concluded in 2023, and Ghana’s external debt restructuring is projected to be finalised by early 2025. Notably, the country’s October 2024 Eurobond exchange improved access to international financing and reduced pressure on the cedi, leading to an upgrade in Ghana’s credit rating by Fitch.
Looking ahead, Fitch forecasts a more stable economic environment in 2025, characterised by stronger GDP growth, declining inflation, and a stabilised exchange rate. These positive economic indicators are expected to lower risks in the banking sector, creating opportunities for sustained growth and resilience among financial institutions.
This optimistic outlook highlights the potential for Ghana’s banking sector to thrive in the post-DDEP era, supported by a more stable macroeconomic landscape and renewed investor confidence.
Email Daily Mail GH: stories@dailymailgh.com or
Whatsapp: +233(0)509928122
