Governor Asiama
Governor of the Bank of Ghana (Bog), Dr Johnson Asiama, has said that it is now time for banks to begin re-evaluating their business models, not only to protect margins but to serve the broader economy.
He made the point that central banks must balance price stability with financial stability, while also navigating increasing government reliance on domestic financing.
Across the region, he said, they see a sharp rise in banks’ holdings of government debt, from 20% of credit portfolios in 2010 to over 35% in 2023.
Ghana mirrors this trend, he said.
Explaining further, Dr Asiama said that as of June 30, 2025, total gross loans by banks stood at GH¢89.16 billion, while investments in government/Bog securities amounted to GH¢162.92 billion.
“This reflects a worrying skew towards risk-free assets, which crowds out private sector credit and dulls the potency of monetary policy transmission,” he said.
He added “But as we are beginning to realise, an era of persistently high interest rates cannot be sustained.”
Dr Asiama stated that it is now time for banks to begin re-evaluating their business models, not only to protect margins, but to serve the broader economy.
“Our banking sector must become a catalyst for growth, with more targeted and productive lending to Ghanaian enterprises.
“We also face a critical challenge in managing exchange rate regimes. While many countries claim to float their currencies, in practice, there is a growing fear of depreciation.
“This de facto resistance to floating limits policy flexibility and can fuel credibility gaps. As a region, we must be honest about this divergence and work toward exchange rate frameworks that are transparent, rules-based, and credible,” he said at the launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana.
