Banking Sector Clean-Up: Ghanaian banks now doing well – World Bank

The World Bank, in its 8th Economic Update for Ghana titled “Strengthening Domestic Revenue Systems for Fiscal Sustainability,” has indicated that a majority of banks operating in Ghana are well-capitalized and do not need any further recapitalization.

In the expert analyses of the Bank, these banks have done remarkably well in their recapitalization efforts within a year of the three-year period set for their full recapitalization, adding that completing the recapitalization process will strengthen the banking sector even further.

The Government of Ghana began a controversial banking sector cleanup in 2017 aimed at strengthening the sector and making the whole financial system more robust.

In 2022, the country was hit by severe macroeconomic imbalances that compelled the Government to seek a bailout from the International Monetary Fund (IMF) and, as a result, undertook a Domestic Debt Exchange Programme in 2023.

The policies of the Government, the World Bank noted, are yielding results, and Ghana is on an economic rebound. However, it advised that the Government must maintain the momentum of the reforms.

“Ghana’s macroeconomic crisis in 2022 has set back poverty reduction efforts, with poverty levels estimated at 30.3% in 2023. It is crucial to maintain the momentum of the reforms, while mitigating the impact on the poor, to help sustain Ghana’s economic rebound. In parallel, we must lay the foundations for more sustainable and resilient economic growth by implementing comprehensive structural reforms to foster economic diversification and promote long-term inclusive growth,” Ms. Michelle Keane, the World Bank Acting Country Director for Ghana, Liberia, and Sierra Leone, wrote in the report.