Dr. Johnson Asiama, BoG President
The Worldwide Financial Fund (IMF) has expressed concern over the rise in non-performing loans (NPLs) in Ghana’s banking sector.
IMF Consultant Ruben Atoyan warned that stronger supervisory measures are wanted to guard current beneficial properties in monetary stability.
He mentioned on Thursday’s PM Categorical Enterprise Version that though Ghana’s banking sector has improved considerably underneath the Prolonged Credit score Facility programme, key vulnerabilities stay.
“Make no mistake, the reforms must be accomplished. That is our view,” he mentioned.
He mentioned the general power of the banking sector had improved “considerably” throughout the IMF-backed program, however the reform course of was not but full.
“The remaining few blocks will full this agenda going ahead,” he mentioned.
Nonetheless, Dr Atoyan cautioned that dangers nonetheless exist, significantly relating to the rise in non-performing loans.
“We nonetheless see a reasonably excessive threat of non-performing loans, particularly in state-owned banks, and this must be addressed going ahead,” he mentioned.
He pressured that whereas mortgage defaults are a part of regular banking, the rise in non-performing mortgage ratios raises broader systemic considerations.
“It isn’t an issue if some loans default, however for those who see the ratio going up, which means the non-performing mortgage ratio goes up,” he mentioned.
“We hope to deal with this with stronger supervisory measures.”
The IMF Head of Delegation mentioned the IMF is at present working intently with the Ghanaian authorities to deal with challenges within the monetary sector, significantly by means of elevated oversight and reform.
He additionally pointed to additional dangers throughout the monetary system past conventional banks.
“One other sector that must be addressed going ahead is specialised depository establishments (SDI), and this can be a sector that should deal with the challenges of the longer term,” he mentioned.
The feedback come as Ghana continues to attempt to stabilize its monetary sector after years of restructuring, recapitalization and tightening laws underneath IMF applications.
Though progress has been made, the Fund means that the subsequent stage of reform requires deeper motion to deal with asset high quality challenges, significantly in state-owned monetary establishments.
