President Nana Addo Dankwa Akufo-Addo says Ghana’s banking sector has become increasingly fragile as a result of the previous government’s bad economic policies, which negatively affected the growth of the sector.

Delivering his first State of the Nation Address on Tuesday in Parliament, President Akufo-Addo said Ghana’s banking sector has not escaped the economic decline.

“Bad loans in the banking sector have risen significantly. Economic and Financial data from the Central Bank show that Non-Performing Loans have risen sharply from 11.2 percent in May 2015 to 17.3 percent in December 2016.

“The recent asset quality review of banks shows significant vulnerability of banks to current economic conditions, with many exhibiting significant weaknesses.”

The president promised to put measures in place to address the problems in the short to medium term.

He said Ghana’s economic growth had also declined dramatically, stating that notwithstanding the record amount of financial resources at the disposal of the previous government, Ghana’s GDP growth in 2016 (including oil) is estimated at 3.6 percent.

The figure, he said, is the lowest GDP growth in about 23 years. “Low growth, rising rate of unemployment, high fiscal deficits, high and rising debt, and increased depreciation of the cedi, high cost of food, housing and utilities and high non-performing loans, among others, are symptoms of deeper structural problems that will require a range of reforms, beginning immediately and spanning the short, medium and long terms.

“We are going to have to implement some tough, prudent and innovative policies to get out of this financial Cul-de-sac and rescue this economy, restore fiscal discipline and debt sustainability, as well as increase economic growth,” he stated.