End of DDEP and Restored Capital Buffers Set to Boost Ghanaian Banks – Fitch Solutions
Ghanaian banks are expected to benefit from the conclusion of the Domestic Debt Exchange Programme (DDEP) and the restoration of capital buffers, according to Fitch Solutions, although elevated asset quality pressures are likely to weigh on profitability.
In its report titled “Sub-Saharan Africa Banking Key Themes For 2026: Banks Navigate Easing Cycles And Consolidation Trends”, the UK-based research firm said the sector’s recovery prospects are supported by improving capital positions following the debt restructuring, even as non-performing loans (NPLs) stood at a relatively high 9.5 percent as of October 2025.
Fitch Solutions noted that while monetary policy across sub-Saharan Africa is becoming more accommodative, loan growth is expected to accelerate across most major markets in 2026, driven by improving macroeconomic conditions.
“We forecast loan growth will accelerate across SSA’s largest banking sectors and the region will experience the strongest growth rate by year-end. This acceleration reflects pent-up demand, improving economic growth prospects and a reduction in government crowding out as fiscal consolidation efforts ramp up and sovereigns look for alternative sources of financing,” the report stated.
The firm observed that in recent years, banks across the region, including Ghana, have significantly increased their exposure to government securities, attracted by elevated yields. In several SSA markets, government securities now account for 20 to 35 percent of total bank assets, compared with 10 to 15 percent before the COVID-19 pandemic.
However, as policy rates ease and yields on government securities compress, Fitch Solutions said banks will come under pressure to redeploy capital into private-sector lending in order to sustain returns.
“This transition will be positive for businesses and the economy as more credit becomes available to support growth initiatives,” the firm said, adding that the shift is likely to be more pronounced in countries pursuing fiscal consolidation and reducing domestic borrowing requirements.
Fitch Solutions further highlighted that the monetary policy environment across major SSA banking sectors has shifted decisively toward easing. Since February 2025, central banks in the region’s largest economies have either cut policy rates or paused following earlier reductions, a trend the firm expects to persist through 2026.
While these developments are expected to support credit expansion and economic activity, Fitch Solutions cautioned that elevated NPL levels, particularly in Ghana, could continue to constrain bank profitability and risk appetite in the near term.
