The International Monetary Fund (IMF) says the majority of the thirteen banks that experienced capital deficiencies following the Domestic Debt Exchange Programme (DDEP) have achieved or exceeded their recapitalisation goals by the end of 2024.
The IMF in its latest Country Report on Ghana released yesterday attributed the progress to strong post-Domestic Debt Exchange profitability and support from the Ghana Financial Stability Fund (GFSF).
It noted that the banks were on track to restore their Capital Adequacy Ratios (CAR) to the regulatory minimum of 13 per cent without regulatory reliefs by end-2025.
The IMF report however, noted that a handful of banks, including a state-owned lender, remained materially behind on their recapitalisation timelines.
“These banks are subject to intensified Bank of Ghana (BoG) monitoring and corrective measures to accelerate recapitalisation plans to reach CAR of 13 per cent (end-March 2025) by end-2025,” the report said.
According to the Fund, the lagging banks have been hampered by delayed capital contributions from shareholders, elevated levels of non-performing loans (NPLs), and the slow booking of credit impairments flagged in the Bank of Ghana’s (BoG) 2023 asset quality reviews.
The IMF added that the implementation of the World Bank-funded segment of the GFSF, pending parliamentary approval, could provide the necessary capital support for some of the undercapitalised banks, provided they meet eligibility criteria.
Meanwhile, the BoG has stepped up its oversight and enforcement efforts on five private and state-owned banks that failed to comply with recapitalisation requirements as of end-December 2024.
These institutions are currently executing revised recapitalisation plans approved by the central bank, with the aim of rectifying past weaknesses and addressing recent underperformance.
They are also expected to implement corrective measures targeting shortfalls in shareholder capital commitments, high Non Performing Loans, and incomplete provisioning of credit losses as identified in the 2023 asset quality assessment.
The BoG’s intensified supervision is intended to ensure full compliance with the regulatory CAR threshold of 13 per cent by the end of 2025.
The IMF also urged the BoG to reduce its role in the foreign exchange market and allow for greater exchange rate flexibility.
It also recommended the adoption of a formal internal intervention framework to improve transparency and predictability.
According to the report The BoG sold $1.4 billion in foreign exchange during the first quarter of 2025, according to the latest International Monetary Fund (IMF) review of Ghana’s programme.
“The Bank of Ghana’s footprint in the Foreign Exchange (FX) market continued to increase. Large-scale FX intervention continued in 2025, reaching $1.4 billion in the first quarter,” it said.
BY DAVID ADADEVOH
