Banking Sector Vulnerabilities Persist as NPL Ratio Stands at 18.7%
Deloitte has flagged Ghana’s elevated Non-Performing Loans (NPLs) ratio as a persistent vulnerability in the banking sector, despite broader improvements in macroeconomic conditions.
In its commentary on the Bank of Ghana’s latest monetary policy decision, the firm noted that although asset quality has improved, the NPL ratio – currently at 18.7% – remains a key risk to financial sector stability.
The caution comes on the back of the central bank’s decision to reduce the monetary policy rate by 150 basis points to 14.0% at its 129th Monetary Policy Committee (MPC) meeting in March 2026, reflecting strengthening domestic economic fundamentals.
According to Deloitte, downside risks remain, particularly from potential inflationary pressures driven by higher global crude oil prices and ongoing geopolitical tensions.
“Although asset quality has improved, the NPL ratio of 18.7% remains a key risk to the banking sector. Possible resurgence in inflationary pressures due to the pass-through effect of higher crude oil prices and ongoing geopolitical tensions,” the firm stated.
The Bank of Ghana’s decision was underpinned by improved macroeconomic indicators, including real GDP growth of 6% in 2025 and a sustained decline in inflation to 3.3% in February 2026. Monetary aggregates also showed moderation, with reserve money contracting by 0.5% during the same period.
External sector performance remained robust, with gross international reserves rising to US$14.5 billion as of February 2026, providing a buffer against external shocks.
Deloitte further observed that real returns on investment remain positive, supported by the wide differential between inflation and interest rates, while improved fiscal and external positions offer the government some headroom to absorb potential shocks.
However, the firm warned of emerging risks, including the possibility of capital outflows as interest rates decline, as well as renewed exchange rate volatility if excess liquidity builds up within the banking system.
The Monetary Policy Committee, chaired by Governor Dr. Johnson Asiama, indicated that it will continue to monitor global developments, particularly tensions in the Middle East, and assess their implications for inflation and overall price stability.
