The economic crisis in Ghana has caused a significant decline in the profits of the banking industry. According to the Bank of Ghana’s latest banking sector report, the industry’s net income declined by 15.6% in 2022. The decline in profits has been attributed to various factors, including the increase in non-performing loans (NPLs) due to the pandemic. The NPL ratio increased from 14.1% in December 2021 to 16.1% in December 2022, with the agriculture and manufacturing sectors being the hardest hit. Additionally, the depreciation of the cedi against major currencies has also contributed to the decline in profits. Despite the decline in profits, the banking sector in Ghana has remained resilient.
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Ghana: IMF appoints resident advisor to central bank
The International Monetary Fund (IMF) has appointed Leonard Chumo as Resident Advisor to the Bank of Ghana (BoG) to help build the capacity of the banking supervision function of the regulator. The appointment, which was made at the behest of BoG, is fully funded by Switzerland’s State Secretariat for Economic Affairs (SECO). Chumo will support the implementation of Pillar two and three of the Basel II/III capital frameworks, as well as strengthen the risk-based supervisory framework at BoG.
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Ghana: Access to financial services leapfrogs due to mobile money, fintech
Financial inclusion in Ghana has increased from 22% in 2011 to 68% in 2021, driven by mobile money, digital banking and fintech solutions, according to the governor of the Bank of Ghana, Dr. Ernest Addison. He stated that the bank’s proactive stance on digital finance and issuance of Branchless Banking Guidelines in 2008 paved the way for fintechs to reach the unbanked and underserved. Despite surpassing the average financial inclusion rate of 55% in sub-Saharan Africa, Dr. Addison stressed there is still much to be done to enhance financial inclusion, especially for women, the unbanked, and underrepresented groups in the population.
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Ghana: Fintech should focus on financial inclusion
The Bank of Ghana has encouraged financial technology companies to invest in traditional financial services such as “susu” operations and to target tech-savvy youth. The central bank believes that this could increase financial inclusion and support economic stability. The Bank of Ghana will work with fintechs to ensure financial services are available to all Ghanaians and a conducive regulatory environment will be provided. The Growth Director of Taptap Send, Africa, has called for the government to relax regulations and restructure its tax policies for the fintech industry.
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Ghana: BoG regulatory sandbox invites applications
The Bank of Ghana (BOG) has opened its regulatory sandbox for financial institutions and fintech startups to test new digital business models and technology. The BOG will accept applications for the first cohort from February 13th to March 14th, with a focus on payments, remittances, crowdfunding, and micro-lending. Successful applicants will be informed within 21 working days after the application window closes.
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Ghana: Bank of Ghana accused of manipulating exchange rate
A former Executive Director of Standard Chartered Bank, Alexander Kofi-Mensah Mould has alleged that the Bank of Ghana (BoG) is reporting manufactured inter-bank exchange rates to manipulate data. Mould said that the BoG is encouraging a two-tiered forex pricing mechanism in the country by reporting a different exchange rate for the dollar at auction than what it publishes as inter-bank rates. He also said that BoG had deliberately kept the dollar rate low at the end of last year in order to reduce Ghana’s debt per GDP number and that this needs to be investigated.
Categories: Regulators -
Ghana: Banks seek shorter maturity on debt swap
Ghanaian banks are seeking to shorten the maturity of local debt in a swap deal with the government, as they grapple with the impact of the coronavirus pandemic and the resulting economic downturn. The banks are also pushing for a reduction in the coupon rate on the debt, which currently stands at 18%.
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Ghana CSA cautions on digital lending apps
The Cyber Security Authority (CSA) in Ghana has warned the public against using mobile apps for digital lending that are not sanctioned by the Bank of Ghana (BoG) and the Data Protection Agency (DPA). It says that it has received reports of cyberbullying experienced by users of digital lending mobile apps, which threaten users with their identities being published as wanted persons or fraudsters on various social media platforms. It advises individuals to review access permissions for mobile applications carefully before installing them.
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BoG steps up dollar support for commercial banks as demand increases
The Bank of Ghana (BoG) is increasing its support for commercial banks to help address the growing demand for the US dollar by large corporations and other businesses. The move follows slower activity by the central bank in supplying US dollars on the forex market. The decision is expected to boost investor confidence and strengthen the gains made by the cedi, which ended 2022 as the second weakest currency on the African continent with a year-to-date loss of 38.86% to the US dollar, according to Bloomberg. The cedi is also the fourth worst currency globally.