The World Bank has noted that banks in Ghana are recovering faster than expected. It said more than half of the 23 banks operating in Ghana would not require recapitalisation.

According to the Bank, the banking sector is stronger and better capitalised than in the period immediately after the Domestic Debt Exchange Program (DDEP), but some risks remain.

“Bank profitability has improved, with the capital adequacy ratio reaching 13.9 percent in December 2023, surpassing the revised prudential minimum of 10 percent. Of banks affected by the DDEP in 2023, more than half are fully capitalised as of the first quarter of 2024, ahead of schedule,” the World Bank said in its 8th Economic Update.

The report added that the Bank of Ghana expects that early completion of recapitalisation efforts will lead to more resilience of the banking sector and position it to provide stronger support for real sector recovery.

It also noted that non-performing loans continue to rise, hitting 20.7 percent of total gross loans in December 2023 and 25.7 percent in April 2024, as part of the lagged impact of the 2022 macroeconomic crisis.

“The balance of payments improved in 2023 thanks to higher remittance inflows and decreased outflows from the debt standstill. 2023 witnessed a reduced trade surplus, with merchandise exports down by 9.3 percent (with lower oil and cocoa but higher gold exports), and imports down by 4.2 percent,” the World Bank said.

Ghana’s main export commodities, including cocoa, crude oil, and gold, remain subject to market volatility and global shocks.

According to the bank, higher remittance inflows and lower interest payments on public debt because of the external debt standstill helped reduce the current account deficit to US$1.1 billion in 2023, below the US$1.7 billion recorded in 2022.

SSD/NOQ

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Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

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Meanwhile, GhanaWeb is set to premiere a documentary on playwright Uncle Ebo Whyte on Monday, August 19, 2024. Watch the trailer below: