- Governor Dr Asiama Urges Banks to Turn Stability into Credit-Fuelled Growth as Policy Rate Falls to 25%
The Bank of Ghana (BoG) has urged the country’s lenders to shift from “defence to growth” after cutting its benchmark policy rate by 300 basis points to 25.0%, citing a decisive fall in inflation and a resurgent currency. Governor of the Bank of Ghana Dr Johnson P. Asiama told chief executives of Commercial Banks at a post-MPC meeting that the macroeconomic reset must now translate into “broader access to credit” to fuel private-sector expansion, but without compromising the stability painstakingly rebuilt over the past two years.
“The stability we enjoy today was hard-won,” Dr Asiama said. “It is now our joint responsibility to leverage it for sustainable and inclusive prosperity.”
The policy shift comes against the backdrop of the sharpest disinflation in years. Headline inflation eased to 12.1% in August 2025, its lowest since late 2021, with inflation expectations “firmly anchored”. GDP growth in Q1 reached 5.3% and a robust 6.8% for the non-oil economy, while the BoG’s Composite Index of Economic Activity expanded 4.4% year-on-year in May, signalling resilience in consumption, trade, construction, and tourism.
Fiscal repair has gathered pace: the first-half deficit narrowed to 0.7% of GDP, well below the 1.8% target. External buffers have strengthened, with US$11.1bn in reserves, equivalent to 4.8 months of import cover. The cedi has appreciated more than 40% year-to-date, offering businesses greater pricing visibility and planning certainty.
“This macro environment is the most favourable we have seen in nearly four years,” Governor Dr Asiama noted. “It is time for our banking sector to help convert stability into tangible growth.”
He also stated in his opening remarks that Ghana’s banks are well capitalised, liquid, and profitable, with non-performing loans trending lower on the back of improved underwriting and friendlier macro conditions. But he cautioned that resilience comes with responsibility. “We must re-examine lending strategies, expand credit to productive sectors, and deepen financial inclusion, all while maintaining disciplined risk standards,” he said.
To reinforce stability and close compliance gaps, the BoG unveiled a consolidated reform package spanning four pillars:
- Credit risk & governance: A Credit Risk Management Directive aligned with Basel standards will set minimum requirements for underwriting, monitoring, and provisioning. A new Bancassurance Directive, a Large Exposures Directive, and credit concentration guidelines will limit concentration risk and push diversification.
- Liquidity & capital resilience: A Liquidity Risk Management Directive will require high-quality liquid assets (HQLA) sufficient to withstand 30-day stress scenarios. It will close loopholes such as misclassifying deposits as borrowings, clarify e-money float treatment, strengthen interest rate risk in the banking book practices, enhance ICAAP, and deepen stress testing.
- Market conduct & FX compliance: Enforcement will tighten under the Foreign Exchange Act and Inward Remittance Guidelines. Unapproved remittance terminations, FX swaps within remittance operations, and unprescribed FX rates will be prohibited. Weekly reports on inward remittances, including transaction details and FX credits to Nostro accounts, will be mandatory, with sanctions under the Payment Systems and Services Act and the BSDI Act for non-compliance.
- Forward-looking oversight:A strategic business-model review will examine the sustainability of bank strategies, with full board and senior management engagement.
The Governor outlined operational adjustments he expects to see in the banking sector:
- Tilt credit to the real economy: Expand SME and mid-market lending where growth multipliers are highest; adjust sectoral limits to meet new concentration caps.
- Re-price and re-term products:Calibrate risk-adjusted pricing and update funds transfer pricing (FTP) curves as policy eases; accelerate interest rate risk analytics to protect margins.
- Lock in liquidity discipline: Build and maintain HQLA buffers, conduct regular 30-day stress tests, and eliminate liabilities misclassification.
- Ensure FX compliance: Standardise remittance reporting pipelines, map all FX flows, and audit rate-setting to avoid breaches.
- Board-level resilience review: Use the thematic review to reassess digital strategy, capital planning, and portfolio sustainability.
Opening the meeting with a minute’s silence for the eight Ghanaians, including two Cabinet Ministers, who died in the August 6 helicopter crash, Dr Johnson P. Asiama described the discussion as a “strategic conversation about the future of banking” rather than a compliance checklist.
“We have an opportunity to expand credit in a way that strengthens the real economy, protects depositors, and cements confidence in our financial system,” he said. “Those who align growth with governance will define the next era of Ghanaian banking.”
New BoG directives at a glance – Credit/Bancassurance/Large Exposures; HQLA 30-day cover; IRRBB; ICAAP; FX/remittance weekly reporting; Strategic model review
