Private Sector Credit Growth Edges Towards Pre-Covid Crisis Levels
Private sector credit in Ghana continued its recovery in 2024, gradually approaching levels seen before the 2022 macroeconomic crisis, according to Dr. Ernest Addison, Governor of the Bank of Ghana.
Speaking at the 122nd Monetary Policy Committee (MPC) press briefing, Dr. Addison highlighted nominal private sector credit growth of 26.3% in December 2024, a significant rise from the 10.7% recorded in December 2023.
In real terms, private sector credit expanded by 2.0% in December 2024, reversing a contraction of 10.2% during the same period in 2023. The recovery reflects improving macroeconomic conditions, which bolstered the banking sector’s ability to extend credit.
Despite the growth, Dr. Addison warned of persistent credit risks, noting that the Non-Performing Loans (NPL) ratio increased to 21.8% in December 2024, up from 20.6% a year earlier. Elevated NPL levels remain a key challenge for the sector, requiring heightened risk management measures.
“The resilience of the banking sector in 2024 was underpinned by improved domestic macroeconomic conditions,” Dr. Addison stated, emphasizing the need for continued efforts to stabilize the sector while managing credit risks.
As private sector credit growth gains momentum, analysts see cautious optimism for further recovery in 2025, provided macroeconomic conditions remain stable and credit risks are adequately managed.
