Accra, Ghana — International credit rating agency Fitch Ratings has cautioned Ghanaian banks to take urgent steps in reducing non-performing loans (NPLs) ahead of 2026, warning that failure to act could undermine financial stability and limit credit growth in the economy.
In its latest sector outlook report released this week, Fitch noted that while Ghana’s banking industry has shown resilience following recent economic shocks, the rising stock of bad loans remains a critical vulnerability. The agency emphasized that banks must improve asset quality and strengthen capital buffers to withstand future risks.
According to the report, high levels of NPLs, driven by loan defaults in sectors such as trade, construction, and manufacturing, continue to weigh heavily on profitability. Fitch added that unless addressed promptly, this could reduce investor confidence and restrict banks’ ability to extend credit to households and businesses.
“Ghanaian banks have weathered difficult macroeconomic conditions, but the challenge of non-performing loans must be addressed decisively before 2026,” the agency said. “Sustained asset quality improvement will be vital for restoring sector confidence and supporting economic recovery.”
The warning comes as Ghana implements reforms under its International Monetary Fund (IMF) support program, aimed at stabilizing the economy after a period of high inflation, debt restructuring, and currency depreciation. Fitch acknowledged these reforms as positive but stressed that banks need to complement government measures with stricter loan recovery processes and better risk management practices.
Financial analysts in Accra say the warning underscores the urgency for banks to strengthen credit appraisal systems and reduce exposure to vulnerable borrowers. They also note that resolving the NPL challenge will be essential for banks to finance key sectors such as agriculture, industry, and infrastructure.
The Bank of Ghana has in recent months introduced measures to enforce stricter capital adequacy requirements and encourage mergers among smaller lenders to build stronger institutions. However, experts caution that without tackling the root causes of loan defaults, systemic risks may persist.
With Fitch’s warning, Ghanaian banks are under increasing pressure to clean up their balance sheets ahead of 2026, a timeline analysts view as critical for restoring confidence in the financial sector and ensuring long-term growth.
