Ghana's Banking Sector Poised for Turnaround as Economy Stabilizes

Fitch Ratings has predicted a turnaround in Ghana's banking sector, contingent on the local economy recovering from its current challenges. The agency cited positive indicators such as recovery from compounding debts, an improved business environment, and other factors likely to drive economic growth. Ghanaian banks recorded profits in 2023 and 2024, attributed to high yields on treasury bills. This growth has helped rebuild the capital base of local banks, which had suffered losses due to the Domestic Debt Exchange Programme (DDEP) in late 2022. Fitch expects a more stable economic environment in 2025, characterized by stronger GDP growth, declining inflation, and a stabilized exchange rate. The recovery of banks will position them to meet regulatory capital requirements once temporary relief measures expire.