Bank of Ghana Governor Dr Johnson Asiama during the meeting with bank CEOs
In his inaugural post-MPC meeting with bank CEOs, Governor of the Bank of Ghana, Dr Johnson Asiama, has emphasised the need for increased collaboration, vigilance, and innovation to strengthen the financial sector amidst ongoing economic challenges.
Dr. Asiama, during the meeting, reflected on the difficulties faced by the banking sector in recent years, including the banking sector clean-up and the Domestic Debt Exchange Program (DDEP), and praised the resilience shown by banks.
He acknowledged that earlier coordination could have mitigated the impact of these events but stressed the importance of learning from them to build a more collaborative and transparent future.
“I do recognise that these events have had deep operational, financial, and reputational consequences for banks, and I want to commend you for the strength, professionalism, and commitment with which you have navigated these storms.
“Many of the fallouts could have been mitigated had the clean-up been more balanced and consultative, and the DDEP, too, could perhaps have been avoided entirely with earlier coordination and foresight. We cannot change the past, but we can learn from it—and it is my intention to build forward with greater collaboration, trust, and accountability between the central bank and all of you,” the BoG Governor said.
Dr. Asiama also addressed the MPC’s decision to raise the policy rate by 100 basis points to 28.0 percent, aimed at reinforcing the disinflation process and preventing inflation from becoming entrenched.
While recognising the short-term impact on borrowing costs, he reassured that the financial sector is well-positioned to absorb these effects and urged banks to exercise prudence in adjusting lending rates.
“We therefore urge banks to exercise prudence in adjusting lending rates and maintain transparent communication with clients. Viable businesses should continue to receive support, and tailored solutions should be explored to mitigate the impact on the most vulnerable sectors,” he pointed out.
Turning to the banking sector’s outlook, the Governor highlighted improved financial stability due to recapitalisation, strong liquidity, and profitability.
However, he noted ongoing concerns over solvency issues at some domestically controlled and state-owned banks.
Dr. Asiama also underscored the importance of embracing digital innovation while strengthening cybersecurity and risk management.
He therefore called for increased support for trade finance and regional integration, urging foreign-owned banks to facilitate cross-border trade to enhance Ghana’s competitiveness.
Looking ahead, the Governor outlined a forward-looking supervisory approach focused on enhancing governance, collaboration, and capacity building for future challenges, including climate risks and the rise of AI in finance.
In conclusion, Dr Asiama reiterated the critical role of financial institutions in Ghana’s economic growth and expressed confidence that with continued collaboration and reform, the financial system could become stronger, more resilient, and inclusive.
MA